HMRC Issues 65,000 Crypto Tax Notices Ahead of OECD Rules
UK crypto tax enforcement is intensifying. HMRC sent nearly 65,000 nudge letters to crypto investors in 2024-25, more than double the prior year. The agency now mines exchange data, bank records and partnerships under the upcoming OECD Crypto-Asset Reporting Framework (CARF) to spot undeclared gains. Crypto tax applies to all digital-asset activities—fiat conversions, token swaps, staking rewards, airdrops and yield farming—while only fiat purchases or wallet-to-wallet transfers are exempt. HMRC’s three-tier pooling method for gain calculations adds complexity for active traders. Tax experts advise proactive reporting using specialized crypto tax software to produce accurate transaction records. To comply with crypto tax rules, traders should prepare detailed statements and seek professional advice upon receiving a letter to avoid penalties. US lawmakers are reviewing de minimis exemptions and clearer rules on staking rewards. Voluntary compliance becomes critical as global exchanges prepare to share full transaction data by 2026.
Bearish
The intensified crypto tax enforcement by HMRC and upcoming OECD reporting rules are likely to exert bearish pressure on the market. In the short term, the surge in nudge letters and stricter compliance requirements may force investors to sell assets to cover tax liabilities, reducing liquidity and dampening trading volume. The complexity of HMRC’s pooling method and looming reporting deadlines can increase operational costs and deter speculative trading. However, in the long term, clearer tax guidelines and standardized reporting may enhance market transparency and institutional confidence, potentially stabilizing prices. Overall, the immediate effect points to a bearish trend as traders adjust to higher compliance burdens.