HM Revenue and Customs: In the past 12 months, 81,000 encrypted tax warning letters have been sent, an increase of 25%

The UK’s HM Revenue and Customs (HMRC) has sent out 81,000 warning letters to cryptocurrency investors suspected of unpaid taxes over the past 12 months, an increase of 25% from approximately 65,000 letters in the previous year. These letters aim to prompt recipients to disclose unpaid taxes, after which HMRC will initiate a formal investigation.

Cryptocurrency exchanges, using tokens to purchase goods or services, and gifting tokens to others may all constitute taxable disposals. Income generated from activities such as lending and staking may be subject to income tax rules, and UK residents are generally required to pay tax on relevant income and gains worldwide.

Rules set to be implemented in April 2027 will apply a no gain, no loss treatment to eligible crypto lending and automated market-making arrangements until an economic disposal occurs, expected to affect around 700,000 individuals. The crypto asset reporting framework requires service providers to submit transaction data for 2026, covering the reporting period from January 1, 2027, to May 31, 2027. It is anticipated that 52 jurisdictions will exchange relevant data in 2027, with an additional 15 jurisdictions joining in 2028.