Crypto Tax Alert: HMRC Sends Tens of Thousands of ‘Nudge Letters’ to UK Investors
UK Crypto Crackdown 2025 – The UK’s HM Revenue & Customs (HMRC) has significantly stepped up its efforts to enforce tax compliance among crypto investors, issuing nearly 65,000 warning letters during the 2024–25 tax year — more than double the 27,700 sent the year prior, according to The Financial Times.
Known as “nudge letters,” these notices urge individuals to voluntarily amend their tax filings before HMRC escalates to formal investigations. The surge in letters highlights the agency’s intensifying focus on crypto-related tax evasion as digital assets become more widely adopted across the UK.
Crypto Ownership Rising Fast in the UK
According to the Financial Conduct Authority (FCA), an estimated seven million UK adults now hold crypto, up sharply from 5 million in 2022 and just 2.2 million in 2021. The dramatic rise in users has pushed regulators to close the gap between crypto trading and tax reporting.
“Even moving from one coin to another can trigger capital gains tax,” said Neela Chauhan, a partner at UHY Hacker Young, the firm that obtained the HMRC data via a Freedom of Information (FOI) request. “Many people simply don’t realize this.”
Tax Surveillance Goes Global
HMRC’s ability to track crypto transactions has also improved. It now receives data directly from major exchanges, and from 2026, it will gain automatic access to international exchange data under the OECD’s upcoming Crypto-Assets Reporting Framework (CARF).
As the UK clamps down, other nations are following suit. In the US, lawmakers are discussing tax exemptions for small crypto payments and better clarity on staking rewards, while South Korea’s National Tax Service has warned that even cold wallets may be seized if linked to unpaid taxes.
