240 people in the UK declared crypto capital gains exceeding one million pounds, HMRC tax tracing fully upgraded

240 people each claimed more than £1 million (about $1.36 million) in cryptocurrency capital gains - the most eye-catching set of figures for the 2024-25 tax year released by Her Majesty's Revenue and Customs (HMRC) on Thursday. This group of people collectively contributed 717 million pounds (about 974 million U.S. dollars) in profits, accounting for a large part of the total declaration amount.

This is the first time HMRC has created a separate field for crypto capital gains on its self-assessment tax form, which in the past could only be reported under the wider capital gains category. As soon as the system changed, the numbers also emerged: a total of 17,600 people declared the disposal of taxable crypto assets throughout the tax year, with the total proceeds from the disposal reaching 13.8 billion pounds (approximately 18.76 billion US dollars), the total gain was 1.38 billion pounds (approximately 1.87 billion US dollars), and the average gain per person was 78,000 pounds (approximately 106,000 US dollars).

What is more noteworthy than the reported figures is the tightening net behind the scenes. According to a report by accounting firm UHY Hacker Young, HMRC sent 81,000 "nudge letters" to cryptocurrency investors suspected of underreporting taxes in the past year, an increase of 25% from 65,000 the previous year, and the number in 2023-24 will be only 27,714. The purpose of this type of letter is to give the recipient an opportunity to proactively make additional reports before a formal investigation is launched.

Neela Chauhan, partner at UHY Hacker Young, made a straightforward judgment on this: “Once HMRC has this data, coupled with some basic AI software, tax investigations against cryptocurrency investors will be as easy as shooting fish from a barrel. With this data, HMRC will be able to build a complete list of all cryptocurrency investors who have defaulted on capital gains tax or income tax.”

Information exchange network will be operational from 2027

The source of this pressure is the OECD Cryptoasset Reporting Framework (Cryptoasset Reporting Framework) implemented in the UK starting in January 2026. HMRC stated that it will receive customer data from crypto asset service providers from 2027, which contains information that can help identify undeclared crypto gains.

According to UHY Hacker Young, from May 31, 2027, HMRC expects to automatically obtain relevant information about UK residents from cryptocurrency exchanges in 52 jurisdictions, with another 15 jurisdictions expected to join from 2028. Capital gains tax taxable disposals covered by HMRC statistics include the sale of crypto-assets such as Bitcoin (BTC), Ethereum (ETH), and Dogecoin (DOGE), as well as the exchange of cryptocurrencies for another crypto-asset, payment for goods or services, and some gifts, all of which may trigger taxable events.

For the 2025-26 tax year, taxpayers whose cryptocurrency income or gains exceed the tax exemption limit must declare through self-assessment and pay the tax due before January 31, 2027.