The UK’s Tax Collector Is Sending Crypto Investors ‘Nudge’ Letters: Report

The letters are meant to be “educational” and do not necessarily mean a recipient is at fault.

AccessTimeIconOct 20, 2021 at 8:03 p.m. UTC
Updated May 11, 2023 at 3:40 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

The United Kingdom’s tax collection agency is preparing to send out letters to crypto investors encouraging them to double-check that they’ve paid the correct amount of taxes on their cryptocurrency investments, according to a report from the Financial Times.

  • Her Majesty’s Revenue and Customs (HMRC) told CryptoUK, a crypto trade organization that works closely with regulators in the U.K., that the so-called “nudge letters” are meant to be “educational,” according to the report.
  • “If you receive a nudge letter it does not necessarily mean you have made an error on your tax return, but you need to ensure that you respond correctly to HMRC,” the HMRC wrote to CryptoUK.
  • The letters, which have not been sent out yet, will ask “cryptoasset holders to review their transactions to ensure that they are declared correctly,” and that investors have paid the proper amount of capital gains taxes and, where applicable, income taxes.
  • In recent years, HMRC has shown an increasing interest in collecting customer data, including transaction history and names from exchanges with a presence in the U.K.
  • “It is likely that HMRC believes large amounts of CGT [capital gains tax] and income tax generated from cryptocurrency investments have been undeclared for tax purposes. In some cases, this could constitute criminal tax evasion,” Graham Boar, an accountant at UHY Hacker Young, told the Financial Times.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Cheyenne Ligon

Cheyenne Ligon is a CoinDesk news reporter with a focus on crypto regulation and policy. She has no significant crypto holdings.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.



Read more about