According to the source, the UK tax authority HM Revenue & Customs is intensifying compliance outreach to crypto investors over unpaid gains, and HMRC classifies most cryptoasset disposals as taxable capital gains that must be reported via Self Assessment. Source: https://www.gov.uk/hmrc-internal-manuals/cryptoassets-manual The UK reduced the Capital Gains Tax annual exempt amount to £3,000 from April 2024, bringing more BTC and ETH profits into scope for tax reporting and payment. Source: https://www.gov.uk/capital-gains-tax/allowances HMRC can obtain user and transaction data from crypto exchanges using statutory information powers and data-gathering notices, while UK crypto firms must comply with the crypto Travel Rule, enhancing traceability of transfers. Source: https://www.gov.uk/guidance/checks-what-hmrc-can-do; https://www.fca.org.uk/firms/cryptoassets/travel-rule Late filing and late payment trigger penalties and interest, increasing effective trading costs for UK-based crypto traders if gains are unreported or paid late. Source: https://www.gov.uk/self-assessment-tax-returns/penalties; https://www.gov.uk/government/publications/interest-rates-for-late-and-early-payments/interest-rates-for-late-and-early-payments For trade planning, HMRC applies pooling and the same-day and 30-day matching rules to cryptoassets, affecting tax-loss harvesting and cost basis calculations, so accurate transaction records are essential. Source: https://www.gov.uk/hmrc-internal-manuals/cryptoassets-manual; https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg51500 Cross-border data visibility is set to expand as jurisdictions implement the OECD Crypto-Asset Reporting Framework, to which the UK has committed, increasing compliance risks for offshore holdings. Source: https://www.oecd.org/tax/exchange-of-information/crypto-asset-reporting-framework-and-amendments-to-the-common-reporting-standard.htm