- MRC issued 65,000 crypto tax warning letters in 2024 – 25, doubling the previous year’s total.
- UK crypto ownership surged to around 7 million adults, highlighting mainstream adoption.
British tax authorities have intensified their hunt for cryptocurrency investors who might not have reported taxable profits on digital assets. The tax agency issued about 65,000 compliance notices in the last fiscal year, which is a huge improvement compared to the past enforcement activities. This crackdown is accompanied by the growth in the number of people owning cryptocurrencies in the United Kingdom, with millions of adults now owning digital assets in their investment portfolios.
Enforcement Campaign Targets Growing Investor Base
During the 2024-25 tax year, HMRC sent almost 65,000 warning notices to cryptocurrency owners, which is more than 27,700 letters sent in the previous tax year. These compliance messages persuade investors to correct their tax filings on their own free will before being subjected to official inquiries that may lead to fines or criminal charges.
In the four years since the growth of cryptocurrency markets and significant growth in valuation, the tax authority has now issued more than 100,000 such notices. The estimates made by the Financial Conduct Authority to monitor the rates of market participation show that about seven million British adults already own cryptocurrency assets. This is a significant increase compared to five million holders in 2022 and only 2.2 million participants reported in 2021, which demonstrates the increasing mainstream adoption.
Tax experts observe that a lot of investors are not aware that the exchange of one cryptocurrency for another generates taxable events that have to be reported in terms of capital gains. The direct data-sharing agreements with the large cryptocurrency exchanges that operate on British markets today have enhanced the enforcement capabilities of HMRC significantly.
Under international reporting standards created by the OECD, the agency will have automatic access to global exchange transaction records starting in 2026. American lawmakers are also looking at tax policy changes that would exempt small cryptocurrency transactions and provide clarity on how staking rewards income should be treated.
South Korean tax authorities have also declared intensive collection campaigns with a threat that digital assets stored in offline storage devices will be confiscated to settle outstanding tax debts. The coordinated international focus indicates that the compliance of cryptocurrency tax is going to be a priority enforcement area of revenue agencies across the world.
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Source: https://thenewscrypto.com/uk-tax-authority-intensifies-crypto-compliance-enforcement/
