British Authorities Send Crypto Tax Notices to Thousands

In a significant development, the HMRC in the United Kingdom has initiated a crackdown on cryptocurrency tax evasion. The tax authority has begun sending notices to citizens, notifying them of their plans to intensify tax enforcement measures concerning cryptocurrency transactions. Over 8,000 reminder letters have already been sent to individuals suspected of avoiding capital gains tax on their cryptocurrency holdings since the start of 2024.

Over the past three years, HMRC has been collecting and organizing data on tax residents of the UK who engage in cryptocurrency trading on various exchanges. Currently, HMRC is using this accumulated information to prepare inquiries and is recommending that everyone voluntarily review their tax calculations related to cryptocurrency transactions.

Failure to meet tax obligations may arise from the fact that cryptocurrency investors may be unsure whether they are required to pay taxes on their digital assets. HMRC is willing to show leniency in the short term, such as through a voluntary disclosure mechanism. However, this practice is unlikely to be applied for long. Taxes must be paid promptly, or cryptocurrency investors could face significant fines, warn officials.

Previously, the UK Treasury announced that King Charles III had signed a bill aimed at "restoring control over the framework of financial services rules" and recognizing cryptocurrency operations as regulated activities. In turn, the country's tax authority demanded that British cryptocurrency investors voluntarily settle tax arrears for four calendar years from the date of their last income declaration.