British authorities have warned 65,000 crypto investors about their tax obligations.
Date: 2025-10-21 Author: Henry Casey Categories: IN WORLD
From January to September 2025, the UK Tax and Revenue Commissioner (HMRC) sent over 65,000 notices to digital asset owners inviting them to voluntarily amend their tax returns. Recipients of the letters were given the opportunity to declare their cryptocurrency profits before potential audits and investigations.
HMRC emphasized that under UK law, cryptocurrencies and other digital assets are considered investment instruments. Therefore, any transaction involving them—sale, exchange, or use for payment—is considered a "disposition of an asset" and is subject to Capital Gains Tax (CGT). This tax also applies to income derived from mining, staking, airdrops, and cryptocurrency-based payments.
The Tax Service warns that ignoring such notices can lead to serious financial consequences. Failure to amend a tax return and pay the tax due can result in a fine of up to 200% of the outstanding amount. These measures are aimed at increasing transparency in the cryptocurrency market and preventing tax evasion.
HMRC estimates that the increase in warnings is due to the growing number of cryptocurrency owners in the country. Currently, there are approximately 7 million of them, representing approximately 13% of the adult economically active population. This growth indicates the widespread adoption of digital assets among Britons, which, in turn, requires increased government oversight.
Furthermore, new requirements set by the UK Financial Conduct Authority (FCA) will come into force in January 2026. According to these requirements, cryptocurrency companies will be required to collect detailed information on their clients' transactions and report it to HMRC. This will give the tax service access to more accurate data on the movement of digital assets, allowing it to more effectively monitor potential violations.
British regulators state that the measures being taken are not aimed at restricting the cryptocurrency industry, but rather serve the purpose of legalizing it and integrating it into the country's financial system. The authorities strive to create conditions under which the digital asset market will operate transparently and in compliance with tax regulations.
Overall, the actions of HMRC and the FCA reflect the British government's intention to increase tax compliance among cryptocurrency owners while simultaneously striking a balance between innovation and financial responsibility.
