The UK Tax Authority has ramped up its investigation of crypto investors, doubling the number of warning letters sent to suspected underreporting or evasion of taxes on digital asset acquisitions.
HM Revenue & Customs (HMRC) issued almost 65,000 letters in the 2024-25 tax year, up from 27,700 last year, the Financial Times reported on Friday, citing 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 a formal investigation is 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 advance.
Related: How to file crypto taxes in 2025 (US, UK, Germany Guide)
7 million UK adults own crypto
The authority on financial behavior Estimates That seven million adults in the UK now hold crypto, up from nearly 10% (5 million) in 2022 or 4.4% (2.2 million) in 2021, shows growing interest.
“The tax rules surrounding crypto are complex and there are now a lot of people who trade in crypto and don’t understand that even if they switch from one coin to another that’s tax-inducing that’s taxed,” Neela Chauhan, a partner at Uhy Hacker Young, who submitted the FOI request, told ft.
HMRC’s visibility in the market has been dramatically improved. The agency now receives transaction data directly from major crypto exchanges and will gain automatic access to global exchange data from 2026 under the organization for economic cooperation and development (OECD)’ Crypto-Assets Reporting Framework (CARF).
Related: New York state senator proposes tax on crypto mining energy use
US lawmakers weigh crypto tax exemptions
US senators are Exploring crypto tax policy updatesincluding exempting small transactions from taxation and clarifying how staking rewards are treated.
During a Senate Finance Committee hearing earlier this month, lawmakers debated whether daily crypto payments should trigger capital gains taxes and how to fairly classify revenue generated from staking services. Coinbase’s vice president of tax, Lawrence Zlatkin, urged Congress to adopt a de minimis exemption for crypto transactions under $300.
Meanwhile, the National Tax Service (NTS) of South Korea has also intensified its explosion In crypto tax evasion, the warning is that even assets stored in cold wallets will be seized if linked to unpaid taxes.
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