UK Tax Agency Sends 65,000 Crypto Tax Letters in Major Crackdown

The UK tax authority, HM Revenue & Customs (HMRC), has issued 65,000 “nudge letters” to crypto investors suspected of owing taxes, more than double last year’s figure, according to the Financial Times.

The letters, typically sent before a formal investigation, target individuals believed to have underreported gains from crypto trading. Accounting firm UHY Hacker Young revealed the figures through a Freedom of Information request, noting that HMRC now receives detailed data directly from exchanges to identify potential tax evaders.

Partner Neela Chauhan said the agency’s approach mirrors efforts in other countries, such as India, where authorities are using Binance data to pursue hundreds of cases.

From January 2026, HMRC will gain even greater access through the Crypto-Asset Reporting Framework (CARF), adopted by over 70 jurisdictions, requiring exchanges to report user activity to tax authorities.

Under UK law, selling, swapping, or spending crypto incurs Capital Gains Tax, while staking rewards, mining, and airdrops count as income.

The crackdown comes as the UK Financial Conduct Authority lifts its four-year ban on crypto exchange-traded notes (ETNs), a move expected to boost the nation’s crypto market by up to 20%.

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