UK Inland Revenue and Customs: 8.1 million encrypted tax warning letters were issued in the past 12 months, the number increased by 25%

Comparatively, the UK Revenue and Customs Service (HMRC) has issued 81,000 warning letters to cryptocurrency investors suspected of not paying taxes in the past 12 months, an increase of 25% over the previous year's approximately 65,000. The purpose of such letters is to induce the recipient to disclose unpaid taxes before HMRC initiates a formal investigation.

Cryptocurrency exchanges, the use of tokens to buy goods or services, and the transfer of tokens to others may all constitute taxable dispositions. Income tax rules may apply to income from borrowing, pledging, etc., and UK residents are generally required to pay taxes on relevant income and earnings worldwide.

The rules, which are scheduled to be implemented in April 2027, will apply no-profit and no-loss treatment to eligible crypto loans and automated market-making arrangements until economic disposition occurs, which is expected to affect approximately 700,000 people. The crypto asset reporting framework requires service providers to submit 2026 transaction data for the reporting period from January 1 to May 31, 2027. It is anticipated that 52 jurisdictions will exchange relevant data in 2027, with 15 more in 2028.