PANews reported on October 19th that The Block, citing the Financial Times, reported that UK tax authorities have issued 65,000 so-called "demand letters" to individuals suspected of underpaying cryptocurrency taxes, a 134% increase from the previous year. Starting in January 2026, HM Revenue and Customs (HMRC) will also collect detailed user information from exchanges under the Crypto-Asset Reporting Framework (CARF), adopted by approximately 70 jurisdictions (including OECD member countries). Under the framework, cryptocurrency exchanges will report information on cryptocurrency traders and their activities to national tax authorities. The agency will collect data throughout 2026, with the first reporting date set for May 31, 2027.

The UK's complex cryptocurrency tax system considers most cryptocurrencies used by individuals to be investments, making the sale, exchange, or consumption of these cryptocurrencies a "disposal" subject to capital gains tax (CGT). Cryptocurrencies "earned" through mining, staking rewards, some airdrops, and employment are considered income and subject to separate income tax. Last fall, CGT rates were increased, with disposals before October 30, 2024, subject to a basic rate of 10% and a higher rate of 20%, while disposals after this date are subject to a basic rate of 18% and a higher rate of 24%.