Time to keep an eye out for some mail, as the HM Revenue & Customs launches a massive letter wave. These letters are being distributed amid reports of high numbers of tax evaders. As a result, 65,000 suspected evaders now face a nationwide crackdown. If you receive a letter, it is recommended that you acknowledge it, as ignorance could be costly. Discover which tax evaders the HM Revenue & Customs are targeting, and ensure that you get all of your ducks in a row before it is too late.
HM Revenue & Customs launches massive letter wave
A term that most people are familiar with is ‘tax evasion.’ While most people dislike paying their taxes, evasion is a criminal offence, as it requires an element of fraud. According to HM Revenue & Customs, in 2020/2021, approximately £400 million in tax was lost due to tax evasion schemes. Other forms of evasion resulted in a further loss of £800 million, including underreporting of income and write-offs of personal expenses.
Yes, tax evasion is a major problem in the UK. However, while some people deliberately evade taxes, others may not be fully informed about what is expected of them. A new trend that is becoming increasingly popular in the UK has also resulted in an increased amount of outstanding owed taxes. This is why the revenue authority has launched a massive letter wave, with 65,000 evaders facing a nationwide crackdown.
65,000 evaders are facing a nationwide crackdown
According to a report by the British Business Bank, while traditional currency remains the most popular in the UK, the digital money system, or cryptocurrency, has increased in popularity over the past few years. Data obtained from the Financial Conduct Authority indicated that nearly 2.3 million people in the UK owned cryptocurrency in 2021, revealing a growth of 0.4 million since 2020.
This increase in popularity indicates a significant shift in demographics, with digital platforms prevailing, which is also a reason why the UK has been experiencing major banking branch closures. According to data obtained through the Freedom of Information Act, the 2024/2025 tax year had 65,000 people owing tax on their cryptocurrency investments. This number was more than double the previous year’s tax debtors.
“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.” – Neela Chauhan, partner at UHY Hacker Young
Avoid becoming a target by doing this
The HM Revenue & Customs distribute these letters as a final warning. Should the recipients continue to ignore the letters, a formal tax investigation will be initiated, targeting those suspected of tax evasion. According to Chauhan, the increase in potential violations can be attributed to the following:
- A growing crypto user base
- Primarily investor ignorance
A tax investigations partner at Price Baily, Andrew Park, revealed a few tips for crypto holders to avoid becoming a target of the HM Revenue & Customs:
- Maintain meticulous transaction records
- Report all due taxes on annual self-assessment returns
- Consider self-reporting
“…unprompted disclosures attract a more benign treatment from HMRC—including lower penalties.” – Andrew Park
In a nutshell, ensure that you get all your ducks in a row. Even if you are opposed to paying tax on your capital gains, the best move would be to declare those capital gains, as it could help you to avoid formal tax investigations and possibly more severe penalties. Transparency is key, so implement it. According to reports, the HM Revenue & Customs has recovered £107 million in owed debt after the first round of tax investigations. As investigations continue, this amount will undoubtedly become significantly higher.
Disclaimer: This article is for informational purposes only and does not constitute tax advice. It does not replace HMRC’s guidance or official notices. To confirm your eligibility or payment status, click the HMRC‑linked resources in our article or log in to your HMRC online account; for personalised advice, consult a qualified tax professional.
