- The agency sent nearly 65,000 “nudge letters” to suspected tax evaders in the 2024–25 tax year.
- Over the past four years, the number of letters issued has surged, showing HMRC’s growing focus on crypto tax compliance.
HM Revenue & Customs (HMRC) has stepped up enforcement activity after identifying gaps in tax declarations from investors who trade cryptocurrencies such as Bitcoin, Ether and stablecoins.
HMRC issued nearly 65,000 so-called “nudge letters” in the 2024–25 tax year to individuals suspected of failing to declare taxable gains from crypto transactions, the Financial Times reported.
This marked a sharp increase from 27,700 letters sent the year before, according to data obtained through a Freedom of Information request. Over the past four years, the number of letters sent has surged, reflecting growing institutional focus on crypto compliance.
The tax authority uses these letters to encourage voluntary disclosure before launching formal investigations. The goal is to prompt individuals to correct historic tax filings or declare gains that may have been missed. Tax specialists warn that many retail investors still misunderstand their tax obligations.
See Related: Tether Unveils Detailed Anti-Illicit Crypto Plans In Letters To US Congress
HMRC Tightens Data Access From Exchanges
The UK tax authority has expanded its ability to track crypto activity by obtaining customer data from major exchanges. Notably, HMRC is increasingly relying on direct exchange data to identify undeclared gains.
From 2026, it will reportedly gain even broader access to international crypto transaction data under the OECD’s Crypto-Assets Reporting Framework, which will enable automatic exchange of information across participating jurisdictions.
The Financial Conduct Authority estimates that around seven million UK adults hold crypto assets worth approximately £12.9bn. The rapid rise in digital asset adoption, combined with recent price gains, Bitcoin alone rose 315% in the two years to October 2025, has created a growing pool of untaxed gains.
Crypto transactions can trigger capital gains tax when assets are sold, exchanged for other cryptocurrencies, or used to pay for goods or services. The annual capital gains allowance is currently £3,000. In some cases, frequent trading may be treated as income rather than capital, making profits liable to income tax and national insurance contributions.
