The UK tax authority doubled the number of warning letters it sent to crypto investors in 2024-2025 tax year, in a sign of a growing crackdown on unpaid capital gains tax on digital assets. According to tax specialists, the amount of unpaid tax could be significant, as many individuals may have been unaware of their tax obligations.
Andrew Park, tax investigation specialist and Partner at accountancy firm Price Bailey, said:
“What we’re starting to see now was always inevitable and, if anything, one wonders what took HMRC so long.”
He added the UK tax office had been working closely with other tax authorities, such as the IRS in the US, for several years to obtain and analyse exchange data on crypto transaction.
“Many taxpayers will have realised very large gains and will have big tax bills. However, many others will have realised large losses too and it will be crucial for them to have retained or have access to good records for them to be able to claim those losses and offset them against any gains,” Park added.
He said it was important for anyone who had bought and sold crypto assets, including exchanging cryptocurrency for other assets, to take urgent professional advice if there is a possibility that they are not tax compliant.
“Unprompted disclosures attract a more benign treatment from HMRC, including lower penalties.”
