HMRC Is Targeting Wealthy Individuals – Crypto Investors Should Pay Attention
HMRC wealthy crypto investors UK
Her Majesty’s Revenue & Customs (HMRC) is turning up the heat on the UK’s wealthiest taxpayers, including those holding substantial crypto assets. A recent report from the National Audit Office (NAO) and commentary from the Institute of Chartered Accountants in England and Wales (ICAEW) highlight HMRC’s sharpened focus on tax compliance among high-net-worth individuals. If you’re a crypto investor or someone with significant wealth, it’s time to ensure your tax affairs are fully in order.
Why HMRC is Focusing on Wealthy Individuals (HMRC wealthy crypto investors UK)
According to the NAO report, HMRC classifies individuals as “wealthy” if they earn over £200,000 per year or have assets exceeding £2 million. This group, although small in number, contributed £119 billion in personal taxes in 2023–24 around 25% of total personal tax receipts.
But here’s the catch: despite the significant tax contribution, compliance risks remain high, especially with offshore assets and emerging digital assets like cryptocurrency. In fact, HMRC’s compliance yield from this group more than doubled in four years from £2.2 billion in 2019–20 to £5.2 billion in 2023–24, according to ICAEW.
Crypto Investors: You’re in the Crosshairs Too
While the reports do not single out crypto investors, HMRC has previously signalled growing concern over undeclared crypto gains. Wealthy individuals who have invested in digital assets whether through DeFi platforms, exchanges, or wallets held offshore are increasingly being scrutinised.
Given the volatility and complexity of crypto tax reporting, many investors inadvertently underreport gains or fail to declare them altogether. HMRC is now leveraging data from crypto exchanges and international information-sharing agreements to track down undeclared crypto income.
What You Should Do to Stay Compliant (HMRC wealthy crypto investors UK)
1. Get Your Records in Order
Keep detailed records of all crypto transactions, including dates, amounts, transaction types, and counterparties. HMRC expects full disclosure, and vague or missing data could lead to fines or audits.
2. Report All Taxable Events
Crypto is subject to Capital Gains Tax (CGT) in most scenarios, including:
- Selling crypto for fiat
- Swapping one crypto for another
- Using crypto to pay for goods or services
- Gifting crypto (except to your spouse or civil partner)
Staking, yield farming, and airdrops may also trigger Income Tax liability.
3. Declare Offshore Assets
If your crypto is held in wallets or exchanges outside the UK, it may be considered an offshore asset. HMRC’s data-sharing agreements allow them to identify undeclared offshore accounts so be proactive about disclosing them.
4. Use the Worldwide Disclosure Facility (WDF) if Necessary
If you’ve missed reporting in previous years, you may be able to make a voluntary disclosure through HMRC’s WDF. This can reduce penalties and show a willingness to comply.
5. Consult a Tax Adviser Familiar with Crypto (HMRC wealthy crypto investors UK)
Given the evolving nature of both tax law and digital assets, working with a professional who understands crypto is essential. Don’t rely on generalised advice get someone who can interpret your situation correctly.
The Cost of Non-Compliance (HMRC wealthy crypto investors UK)
HMRC’s increased enforcement efforts have led to a sharp rise in compliance yield, but also a fall in the number of penalties issued indicating a shift toward early interventions and targeted investigations. Still, failing to file or disclose properly could lead to:
- Penalties of up to10% to 200% of tax owed
- Interest on unpaid tax
- Criminal prosecution in severe cases
Final Thoughts (HMRC wealthy crypto investors UK)
Wealth and digital assets bring complexity, and HMRC’s message is clear: no one is outside the scope of compliance. As enforcement becomes more sophisticated, the best defence is proactive planning and full transparency.
If you’re a crypto investor or high-net-worth individual, now is the time to take your tax affairs seriously not just to avoid penalties, but to protect your wealth long-term. HMRC wealthy crypto investors UK
Visit: MyCryptoTax
FAQ’s
What counts as “wealthy” for HMRC in this context?
Individuals earning £200,000+ a year or holding £2m+ in assets fall into HMRC’s “wealthy” segment. If you’re in this group and hold crypto (including DeFi or offshore wallets), make sure your records and filings are HMRC-ready.
How should wealthy crypto holders stay compliant—and what if I missed past years?
Keep complete transaction records, report all disposals (including crypto-to-crypto swaps) and any staking/airdrop income, and disclose offshore holdings. If you’ve missed earlier years, consider a voluntary disclosure via HMRC’s Worldwide Disclosure Facility (WDF) to reduce potential penalties.
DISCLAIMER
© My Accountancy Team 2025 All Rights Reserved – The above articles are provided for guidance only and may not cover your personal circumstances so you should not rely on them. It is important that you seek appropriate professional advice which takes into account your personal circumstances where you can provide the full facts of the case and all documents related to your case. My Accountancy Team Ltd t/a mycryptotax.co.uk, cannot be held responsible for the consequences of any action or the consequences of deciding not to act.
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