Business

HMRC doubles crypto warning letters amid surge in UK digital asset investments

Sunday, 19 October 2025 4:07AM UTC

HM Revenue & Customs has intensified its crackdown on UK's crypto investors, sending nearly 65,000 warning letters in 2024–25 — more than double the previous year — as it seeks to curb tax evasion and increase oversight of digital asset gains.

HM Revenue & Customs (HMRC) has markedly intensified its crackdown on cryptocurrency investors in the UK by more than doubling the number of warning letters sent to individuals suspected of underreporting or evading taxes on digital asset gains. In the 2024–25 tax year alone, nearly 65,000 such “nudge letters” have been dispatched, a sharp rise from the 27,700 issued the year before. These letters serve as formal warnings encouraging recipients to voluntarily amend tax returns related to cryptocurrency before facing full investigations and potential penalties.

This marked escalation is part of HMRC’s broader enforcement campaign targeting undeclared income from crypto transactions, signalling the agency’s commitment to securing greater tax compliance in the burgeoning digital asset sector. The letters specifically address gains from cryptocurrencies, aiming to correct misunderstandings among some investors who mistakenly believe crypto gains may be tax-exempt. According to HMRC, taxpayers are urged to understand and adhere to the tax rules applicable to digital assets, emphasising that gains from crypto transactions are liable for capital gains tax (CGT).

The recent increase in these notices aligns with explosive growth in cryptocurrency adoption in the UK. The Financial Conduct Authority estimates that approximately seven million UK adults now hold crypto assets, a substantial rise from about 5 million in 2022 and just 2.2 million in 2021. This growth reflects the rapid expansion of crypto as a mainstream retail investment class, underlining why regulatory bodies are intensifying oversight.

Industry experts highlight the complexity of crypto tax regulations, particularly around triggering events such as converting from one coin to another or transferring assets between wallets or platforms—actions that can incur CGT liabilities but are often misunderstood by investors. Neela Chauhan, a partner at accounting firm UHY Hacker Young, has observed that many taxpayers are unaware that such routine crypto activities may have tax implications, which partially explains the increased volume of HMRC warning letters.

HMRC’s enforcement capabilities have been strengthened through direct access to transaction data from major cryptocurrency exchanges. This transparency is set to increase further with the upcoming implementation in 2026 of the OECD’s Crypto-Assets Reporting Framework (CARF), which will grant HMRC automatic access to global exchange data, making tax evasion in the crypto space increasingly difficult. CARF and related Anti-Money Laundering (AML) measures are part of a multifaceted regulatory push designed to heighten transparency, close loopholes in ownership reporting, and combat financial crime linked to digital assets.

Proposed UK regulations also seek to tighten AML standards for crypto firms by lowering reporting thresholds and demanding clearer disclosure of ownership control structures. These steps align closely with broader European regulatory actions targeting financial crime in the cryptocurrency industry. Essentially, the UK is moving decisively towards comprehensive governance of crypto activities, balancing innovation with robust oversight.

The drive by HMRC is mirrored by ongoing discussions in other jurisdictions such as the United States, where lawmakers are deliberating reforms to make tax treatment more crypto-friendly, including potentially exempting small transactions from tax and clarifying rules around staking rewards. Globally, regulators face the challenge of fostering innovation while enforcing tax compliance and preventing illicit activities.

In summary, HMRC’s doubling of crypto tax warning letters is a clear signal to digital asset investors in the UK that tax compliance will be rigorously enforced. With millions of Britons now engaged in the crypto market, and data-sharing frameworks set to tighten, investors are strongly advised to review and correct their tax positions promptly. This escalation reflects a turning point in the regulation of cryptocurrencies, where enhanced scrutiny and transparency measures aim to close the gap on undeclared gains and promote greater financial integrity in the sector.

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Source: Noah Wire Services

More on this

https://www.livebitcoinnews.com/crypto-news-uk-tax-authority-tightens-grip-on-crypto-investors/ - Please view link - unable to able to access data
https://www.mexc.com/en-GB/news/uks-hmrc-targets-crypto-investors-in-major-tax-crackdown/134195 - HM Revenue & Customs (HMRC) has intensified its scrutiny of cryptocurrency investors, sending nearly 65,000 warning letters in the 2024–25 tax year, more than doubling the previous year's total of 27,700. These 'nudge letters' aim to encourage voluntary correction of tax filings before formal investigations commence. The surge reflects HMRC's growing focus on crypto-related tax compliance, with over 100,000 such letters issued in the past four years. The increase coincides with a rise in UK adults holding crypto assets, now estimated at around 7 million, up from 5 million in 2022 and 2.2 million in 2021. The Financial Conduct Authority reports that approximately 7 million UK adults now hold cryptocurrency, highlighting the growing interest in digital assets. The letters serve as preliminary warnings before formal investigations, urging investors to correct their tax filings voluntarily. The escalation reflects HMRC's growing focus on crypto-related tax compliance, with over 100,000 such letters issued in the past four years. The increase coincides with a rise in UK adults holding crypto assets, now estimated at around 7 million, up from 5 million in 2022 and 2.2 million in 2021. The Financial Conduct Authority reports that approximately 7 million UK adults now hold cryptocurrency, highlighting the growing interest in digital assets.
https://www.crowdfundinsider.com/2025/10/254745-uk-fires-off-65000-crypto-tax-alerts-amid-rising-adoption/ - HM Revenue & Customs (HMRC) has escalated its efforts to enforce tax compliance among cryptocurrency investors, sending nearly 65,000 warning letters in the 2024–25 tax year, more than doubling the previous year's total of 27,700. These 'nudge letters' aim to encourage voluntary correction of tax filings before formal investigations begin. The surge reflects HMRC's growing focus on crypto-related tax compliance, with over 100,000 such letters issued in the past four years. The increase coincides with a rise in UK adults holding crypto assets, now estimated at around 7 million, up from 5 million in 2022 and 2.2 million in 2021. The Financial Conduct Authority reports that approximately 7 million UK adults now hold cryptocurrency, highlighting the growing interest in digital assets. The letters serve as preliminary warnings before formal investigations, urging investors to correct their tax filings voluntarily. The escalation reflects HMRC's growing focus on crypto-related tax compliance, with over 100,000 such letters issued in the past four years. The increase coincides with a rise in UK adults holding crypto assets, now estimated at around 7 million, up from 5 million in 2022 and 2.2 million in 2021. The Financial Conduct Authority reports that approximately 7 million UK adults now hold cryptocurrency, highlighting the growing interest in digital assets.
https://cointelegraph.com/news/uk-tax-authority-doubles-crypto-warning-letters-hmrc-crackdown - HM Revenue & Customs (HMRC) has intensified its scrutiny of cryptocurrency investors, doubling the number of warning letters sent to those suspected of underreporting or evading taxes on digital asset gains. HMRC issued nearly 65,000 letters in the 2024–25 tax year, up from 27,700 the year before, according to data obtained under the Freedom of Information Act. The letters, known as 'nudge letters,' are designed to prompt investors to voluntarily correct their tax filings before formal investigations are launched. The sharp increase reflects HMRC's growing focus on crypto-related tax compliance. Over the past four years, the agency has sent more than 100,000 such letters, with activity accelerating as crypto adoption and asset prices surged. The Financial Conduct Authority estimates that seven million UK adults now hold crypto, up from around 5 million in 2022 and 2.2 million in 2021, showing the growing interest. The tax rules surrounding crypto are quite complex, and there's now a volume of people who are trading in crypto and not understanding that even if they move from one coin to another it triggers capital gains tax, Neela Chauhan, a partner at UHY Hacker Young, which submitted the FOI request, told the FT. HMRC's visibility into the market has improved dramatically. The agency now receives transaction data directly from major crypto exchanges and will gain automatic access to global exchange data from 2026 under the Organisation for Economic Co-operation and Development (OECD)'s Crypto-Assets Reporting Framework (CARF).
https://financefeeds.com/uk-sends-65000-letters-to-suspected-crypto-tax-evaders/ - HM Revenue & Customs (HMRC) has intensified its oversight of cryptocurrency investors, sending almost 65,000 warning letters in the 2024–25 tax year—more than double the 27,700 issued the previous year, according to figures obtained by the Financial Times under the Freedom of Information Act. The notices, often called 'nudge letters,' encourage taxpayers to correct filings voluntarily before formal investigations begin. Over the past four years, HMRC has sent more than 100,000 such letters, part of a sustained effort to bring digital asset profits under tighter tax compliance. The escalation reflects growing concern within the UK Treasury over unreported crypto transactions as prices and retail participation have surged. Industry analysts say many investors remain unaware that converting between tokens or moving assets between platforms can trigger capital gains tax liabilities. HMRC's expanded scrutiny signals that the era of informal crypto trading in the UK is closing. Investors can expect automatic reporting and tougher enforcement by 2026. Seven Million Britons Hold Crypto The Financial Conduct Authority estimates that around seven million UK adults—roughly 13% of the population—now hold cryptocurrency, up from about 10% in 2022 and 4% in 2021. The rapid growth has made crypto one of the fastest-expanding asset classes among retail investors in Britain. 'The tax rules surrounding crypto are quite complex, and there's now a volume of people who are trading and not understanding that even moving from one coin to another triggers capital gains tax,' said Neela Chauhan, a partner at accounting firm UHY Hacker Young, which filed the FOI request. Chauhan said the increase in letters shows HMRC's willingness to act ahead of the global data-sharing rules that take effect in 2026. Global Data-Sharing to Tighten Enforcement HMRC's visibility into crypto transactions has improved sharply. The agency now receives transaction data directly from major crypto exchanges and will gain automatic access to global exchange data from 2026 under the Organisation for Economic Co-operation and Development (OECD)'s Crypto-Assets Reporting Framework (CARF).
https://www.gncrypto.news/news/uk-tax-agency-targets-unpaid-crypto-gains/ - HM Revenue & Customs (HMRC) has more than doubled the number of warning letters sent to cryptocurrency investors over potential unpaid capital gains taxes, reflecting a broader push to enforce compliance in the fast-growing digital asset sector. According to data released under the Freedom of Information Act, HMRC issued 64,982 warning letters in the 2024–25 tax year—up from 27,713 the year before and 8,329 in 2021–22. The letters, known as 'nudge letters,' are sent to individuals suspected of underreporting gains from trading or disposing of crypto assets. Tax experts say the increase points to a growing enforcement effort as the UK's crypto market expands. The Financial Conduct Authority estimates around 7 million UK adults now hold roughly £12.9 billion worth of crypto assets, up from £7.8 billion in 2022. Over the same period, Bitcoin's price has risen more than 300%. The surge in warning letters coincides with a rise in UK adults holding crypto assets, now estimated at around 7 million, up from 5 million in 2022 and 2.2 million in 2021. The Financial Conduct Authority reports that approximately 7 million UK adults now hold cryptocurrency, highlighting the growing interest in digital assets. The letters serve as preliminary warnings before formal investigations, urging investors to correct their tax filings voluntarily. The escalation reflects HMRC's growing focus on crypto-related tax compliance, with over 100,000 such letters issued in the past four years. The increase coincides with a rise in UK adults holding crypto assets, now estimated at around 7 million, up from 5 million in 2022 and 2.2 million in 2021. The Financial Conduct Authority reports that approximately 7 million UK adults now hold cryptocurrency, highlighting the growing interest in digital assets.
https://www.theblock.co/post/375200/uk-tax-authority-sends-65000-letters-to-suspected-crypto-tax-evaders-more-than-double-last-years-count-ft - HM Revenue & Customs (HMRC), the UK tax authority, has sent out 65,000 letters to crypto investors suspected of owing taxes on their holdings, an increase of 134% compared to the year prior, according to a report from the Financial Times. Accounting firm UHY Hacker Young filed a Freedom of Information Act request to obtain the figures, and the FT reports that the 'nudge' letters are typically sent out to individuals suspected of tax avoidance or evasion before a formal investigation is launched. Neela Chauhan, a partner at UHY Hacker Young, told the FT that HMRC receives data from crypto exchanges directly, and is likely using that data to find cases of tax avoidance. India's tax authority is likewise targeting more than 400 suspected tax evaders likely using data received directly from Binance, indicating that tax agencies around the world have better access to crypto trading data than in prior years. Starting in Jan. 2026, HMRC will also receive detailed user information from exchanges as part of the Crypto-Assets Reporting Framework (CARF) adopted by about 70 jurisdictions, including OECD members.

Noah Fact Check Pro

The draft above was created using the information available at the time the story first emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed below. The results are intended to help you assess the credibility of the piece and highlight any areas that may warrant further investigation.

Freshness check

Score: 9

Notes: The narrative reports on HMRC's recent increase in 'nudge letters' to crypto investors, with nearly 65,000 letters sent in the 2024–25 tax year, up from 27,700 the previous year. This information aligns with reports from August 2024 and October 2025, indicating the content is current and not recycled. ([cointelegraph.com](https://cointelegraph.com/news/uk-tax-authority-doubles-crypto-warning-letters-hmrc-crackdown?utm_source=openai))

Quotes check

Score: 8

Notes: The narrative includes a quote from Neela Chauhan, a partner at UHY Hacker Young, stating, 'The tax rules surrounding crypto are quite complex and there’s now a volume of people who are trading in crypto and not understanding that even if they move from one coin to another it triggers capital gains tax.' This quote appears in reports from October 2025, suggesting it is not recycled. ([financefeeds.com](https://financefeeds.com/uk-sends-65000-letters-to-suspected-crypto-tax-evaders/?utm_source=openai))

Source reliability

Score: 7

Notes: The narrative originates from Live Bitcoin News, a platform that aggregates cryptocurrency news. While it provides timely information, its reputation for original reporting is unclear, which may affect the reliability of the content.

Plausability check

Score: 9

Notes: The narrative's claims about HMRC's increased scrutiny of crypto investors and the complexities of crypto tax regulations are consistent with reports from reputable sources like Cointelegraph and the Chartered Institute of Taxation. ([cointelegraph.com](https://cointelegraph.com/news/uk-tax-authority-doubles-crypto-warning-letters-hmrc-crackdown?utm_source=openai))

Overall assessment

Verdict (FAIL, OPEN, PASS): OPEN

Confidence (LOW, MEDIUM, HIGH): MEDIUM

Summary: The narrative provides current information on HMRC's intensified efforts against crypto tax evasion, supported by recent reports and expert quotes. However, the source's reliability is uncertain, which warrants further verification.

HMRC
cryptocurrency
tax compliance