According to a recent report, the UK tax authorities have sent tens of thousands of “nudge letters” to individuals suspected of not paying or under-reporting taxes on their crypto gains. The move reflects increased tax scrutiny of crypto investors around the world over the past year.
UK tax authorities to collect user data from exchanges around the world from 2026
The Financial Times (FT) reported on October 17 that UK tax authority HM Revenue and Customs (HMRC) has sent around 65,000 letters to digital asset holders suspected of evading tax on their profits. These letters, formally known as “nudge letters,” are written to ask investors to amend their tax returns before a formal investigation takes place.
The figures represent a 134% increase on last year’s letter and were obtained by accountancy firm UHH Hacker Young in a Freedom of Information Act request submitted to HMRC. Neera Chauhan, a partner at an accountancy firm, told the Financial Times that the UK tax authorities are now receiving transaction data directly from major exchanges to identify and confirm cases of crypto tax evasion.
Mr Chauhan told the FT:
The tax system surrounding cryptocurrencies is very complex, and many people who currently trade cryptocurrencies do not understand that even moving from one coin to another is subject to capital gains tax.
Additionally, HMRC will also receive access to user information from global exchanges from January 2026 under the Organization for Economic Co-operation and Development’s (OECD) Crypto Asset Reporting Framework (CARF). HMRC plans to collect data throughout 2026, with the first tax return due on 31 May 2027.
The UK cryptocurrency scene continues to grow, and digital asset regulation appears to be taking a better shape in the region. Recently, the Financial Conduct Authority lifted a four-year ban on exchange-traded securities (ETNs) linked to cryptocurrencies, allowing asset managers to offer indirect digital asset exposure to retail traders on the London Stock Exchange.
Indian tax authority orders investigation against Binance trader
Taxation of cryptocurrencies has been tightened around the world, with tax authorities in other countries investigating digital asset traders and holders suspected of tax evasion.
As reported by Bitcoinist, India’s Income Tax Department under the Central Board of Direct Taxes (CBDT) recently ordered an investigation into 400 high net worth individuals (HNIs) for concealing crypto transactions on the Binance exchange.
These investors are suspected of evading taxes on their digital asset gains between 2022-2023 and 2024-2025, while failing to disclose their investments in various foreign exchange wallets.
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