In a big push to improve tax compliance, HMRC sent out over 65,000 nudge letters to hobby crypto traders it suspects of underpaying tax on gains, while holders not clear about tax rules
With an estimated £12.9bn held by UK taxpayers in crypto, up from £7.8bn in 2022, HMRC is not waiting for the new global rules on cryptocurrency trading platform disclosures coming in next year, before ramping up compliance activity.
The number of warning letters HMRC has issued to individuals suspected of owing tax on their cryptocurrency dealings increased 134% in the tax year 2024/25 to 65,000, up from less than 28,000 the previous year, says UHY Hacker Young.
‘The sharp rise in cryptocurrencies prices since 2023 means that the amount of undeclared capital gains tax (CGT) from crypto investments has also ballooned,’ warned UHY Hacker Young.
HMRC sends nudge letters to people it suspects of tax avoidance or evasion to give them the chance to pay their tax bills before an investigation into them is opened.
