According to a recent report, the United Kingdom tax authority has sent out tens of thousands of “nudge letters” to individuals suspected of owing or underreporting taxes on their crypto asset gains. This move reflects the increased tax scrutiny of cryptocurrency investors around the world over the past year.
This figure, which represents a 134% increase from last year’s letters, was obtained by accounting firm UHH Hacker Young, which submitted a Freedom of Information Act request to the HMRC. Neela Chauhan, a partner at the accounting firm, revealed to Financial Times that the UK tax authority now receives transaction data directly from major exchanges in order to identify and confirm cases of crypto tax evasion.
Chauhan told FT:
The tax rules surrounding crypto are quite complex, and there’s now a volume of people who are trading in crypto and not understanding that even if they move from one coin to another, it triggers capital gains tax.
Furthermore, HMRC will also receive access to user information from global exchanges starting from January 2026 under the Organization for Economic Co-operation and Development (OECD)’s Crypto-Assets Reporting Framework (CARF). The UK tax office intends to collect data throughout 2026, with the first filing slated for May 31, 2027.
Crypto taxation has been ramping up all around the world, with other countries’ tax regulators also probing digital asset traders and digital asset holders suspected of avoiding tax.
These investors are suspected of avoiding taxes on their digital asset gains between 2022-23 and 2024-25, while also failing to disclose their investments in various exchange wallets outside the country.
