The UK’s tax authority, HM Revenue & Customs (HMRC), sent nearly 65,000 so-called “nudge letters” to people it suspects of under-declaring crypto gains in the 2024–25 tax year — more than double the previous year — the Financial Times reports. HMRC told the paper it is increasingly using exchange data to identify potential non-compliance and will begin collecting more detailed user information from crypto platforms from 1 January 2026 under the OECD’s Crypto-Asset Reporting Framework (CARF).
What HMRC did and why it matters
HMRC’s recent nudge letter campaign — designed to prompt voluntary disclosure of unpaid tax rather than immediate enforcement action — surged in scale after years of limited outreach to crypto holders. The Financial Times, citing a freedom-of-information response, said almost 65,000 letters were sent in 2024–25, compared with far fewer in prior years, highlighting a stepped-up focus on digital-asset compliance. Tax experts told reporters that the letters aim to trigger corrections before HMRC starts formal enquiries or penalty processes.
HMRC has also said it will make greater use of data obtained directly from crypto exchanges and, from 2026, will receive standardised reports under the OECD’s CARF — a global automatic-exchange framework intended to give tax authorities transaction-level visibility across jurisdictions.
How CARF changes reporting and what starts when
The Crypto-Asset Reporting Framework (CARF), developed by the OECD, sets out common rules for crypto-asset service providers to collect and report8 user and transaction details to domestic tax authorities, which can then be shared internationally. Many jurisdictions — including the UK — will require platforms to start collecting the specified user data from 1 January 2026, with the timing for the automatic exchange of reports depending on each country’s implementation timetable. The OECD’s FAQs and implementation guides explain the phased approach and the types of data in scope.
What is taxable in the UK?
HMRC treats most disposals of crypto as disposals of an asset — so gains from selling, swapping or spending crypto can trigger Capital Gains Tax (CGT). Separately, activities that generate income — such as staking rewards, some airdrops that are payments for services, mining or earning crypto as remuneration — are likely to be treated as income and taxedz under Income Tax rules. HMRC’s public guidance and accompanying pages explain when CGT or Income Tax applies and list the records taxpayers should keep.
Reaction from industry and tax advisers
Accountants and crypto tax specialists say the combination of direct exchange data and CARF will make it much harder for individuals to hide disposals or income from crypto activity. Many in the sector advise that individuals maintain full transaction records (dates, values in GBP at disposal/acquisition, purposes of transfers) and consider voluntary disclosures if they discover unpaid tax, because HMRC typically offers more favourable treatment for proactive corrections. Advisory firms also warn that frequent trading patterns can, in some cases, convert a taxpayer’s crypto activity into trading income — attracting Income Tax and National Insurance rather than CGT.
What it means for crypto users
- Expect more accurate and timely reporting of crypto transactions to HMRC as exchanges implement CARF collection rules from Jan. 1, 2026.
- Individuals who sold, swapped or spent crypto and did not report gains should review records and consider using HMRC’s guidance on “tell HMRC about unpaid tax on cryptoassets” to make voluntary disclosures.
- Users receiving staking rewards, some airdrops, mining proceeds or other crypto income should treat these as potential taxable income at the time they are received; later disposals may also trigger CGT.
What to watch next
- Formal CARF implementation updates — watch for UK legislation and guidance that clarify exact reporting start dates for exchanges and the schedule for cross-border exchange of CARF reports.
- HMRC enforcement follow-ups — whether the nudge letters lead to a wave of voluntary disclosures, or whether HMRC moves to audits and penalties for non-responders.
- Exchange compliance notices — crypto platforms operating in or serving UK customers will publish changes to their onboarding and data-collection flows to comply with CARF.
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