Core Insights - The U.K. crypto sector is preparing for potential tax crackdowns as Chancellor Rachel Reeves is set to present her first Budget on November 26, with indications of tighter tax enforcement and reporting rules [1][6] - HM Revenue & Customs (HMRC) has significantly increased its efforts to pursue unpaid crypto taxes, sending nearly 65,000 warning letters to suspected tax under-payers in the 2024/25 financial year, more than double the previous year's figures [1][2][6] - Starting in 2026, HMRC will automatically receive data from major global trading platforms under the OECD Crypto-Assets Reporting Framework, enhancing its ability to monitor investors' activities [3] Tax Enforcement and Compliance - HMRC's recent actions include sending letters to individuals suspected of failing to report gains from trading, spending, or transferring cryptocurrencies, utilizing exchange data and international cooperation to identify non-compliance [2] - The complexity of tax rules surrounding cryptocurrencies has led to many traders being unaware that moving from one coin to another can trigger capital gains tax [3] Budget Implications - Although no specific crypto measures have been announced ahead of the Budget, officials have indicated that closing tax loopholes and tightening enforcement will be key themes [4] - The government is also reviewing the treatment of small imported parcels under U.K. customs rules, which may impact e-commerce platforms and align with broader strategies to address under-reported economic areas like crypto trading [4][7] Industry Concerns - The British crypto sector is expressing concerns that rising taxes and regulatory uncertainty may drive investment abroad, highlighting the need for a more favorable regulatory environment [6] - Major British retailers have called for reforms to the current system, arguing that it provides an unfair advantage to overseas sellers, which could also apply to the crypto trading landscape [7]