HMRC sends 65,000 letters to UK residents in latest tax crackdown | Personal Finance | Finance
HMRC has sent 65,000 letters to Brits believed to owe tax in the latest crackdown from the Labour Party. Sir Keir Starmer‘s administration has more than doubled the number of letters sent to cryptocurrency investors from the year before.
The letters will be sent to investors who owe tax on their digital currency investments during the 2024/25 tax year. According to a Freedom of Information request, this figure is up from 27,700 in 2023/24 and none in 2022/23. Meanwhile, a total of 8,329 letters were dispatched to crypto investors in 2021/22.
As reported by Chronicle Live, Neela Chauhan, partner at accountancy firm UHY Hacker Young, which made the FOI request, said: “The tax rules surrounding crypto are quite complex and there’s now a volume of people who are trading in crypto and not understanding that even if they move from one coin to another it triggers capital gains tax.”
She added: “You do get some crypto traders who are opposed to the idea of paying tax on their gains. As HMRC gains access to more data, it will probably intensify its tax crackdown on crypto investors. Those who haven’t declared their capital gains will find it increasingly difficult to avoid the tax authority’s attention.”
Andrew Park, tax investigations partner at accountants Price Bailey, added: “What we’re starting to see now was always inevitable and, if anything, one wonders what took HMRC so long. Many taxpayers will have realised very large gains and will have big tax bills.
“However, many others will have realised large losses too and it will be crucial for them to have retained or have access to good records for them to be able to claim those losses and offset them against any gains.”
According to the Financial Conduct Authority , around seven million adults in the UK hold an estimated £12.9 billion in cryptocurrency assets. This is up from £7.8 billion in 2022.
Cryptocurrency is a digital asset and different from coventional currencies such as pounds sterling, euros or US dollars. However, profits or gains from buying and selling cryptocurrency are taxable.
