The UK’s HM Revenue and Customs (HMRC) sent 81,172 tax warning letters, emails and text messages to crypto investors during the 2025/26 financial year, according to figures reported on Aug. 20.
Summary
- 81,172 warnings reached crypto investors in 2025/26, up from 64,982 during the previous financial year.
- HMRC treats crypto sales, swaps, purchases and most gifts as potential taxable disposals for investors.
- UK service providers began collecting customer details under the Cryptoasset Reporting Framework in January 2026.
- Platforms must submit their first reports covering 2026 activity to HMRC by May 31, 2027.
- Unpaid domestic tax can attract penalties reaching 100% of tax due, plus accrued interest charges.
The number rose from 64,982 warnings in 2024/25 and 27,714 in 2023/24. The latest total was therefore about 25% higher than the previous year and nearly three times the figure recorded two years earlier.
The figures came from a Freedom of Information request obtained by accounting firm UHY Hacker Young and reported by the BBC. HMRC reportedly suspects that some undeclared liabilities arose from gains accumulated as crypto prices increased between late 2022 and 2025.
HMRC has not disclosed how much unpaid tax the latest warning campaign identified. A warning, commonly called a nudge letter, also does not automatically mean its recipient owes tax or faces a formal investigation.
HMRC crypto tax warnings target possible underpayments
HMRC sends warning communications when information available to the agency suggests that a taxpayer may have omitted income or capital gains. Recipients are generally asked to review their records and correct any errors.
UK taxpayers may owe Capital Gains Tax when they sell crypto for fiat currency, exchange one token for another, purchase goods with crypto or give tokens to another person. Gifts to spouses, civil partners and qualifying charities usually receive different treatment.
The tax applies to gains rather than the total value of a transaction. Individuals must calculate proceeds in pounds sterling and deduct eligible acquisition costs. HMRC’s official guidance also requires investors to maintain records for each token pool.
Crypto received through employment, mining, staking, lending or some decentralized finance arrangements may instead create Income Tax and National Insurance obligations. A later disposal can produce a separate capital gain.
Reporting rules will give HMRC more exchange data
The UK introduced the Cryptoasset Reporting Framework on Jan. 1, 2026. Since that date, covered crypto service providers have been required to collect identifying information and transaction data from customers.
Required information can include names, addresses, tax residences and tax identification numbers. Providers must submit their first reports covering 2026 activity between Jan. 1 and May 31, 2027, according to HMRC’s published rules.
The framework also supports information exchanges between participating tax jurisdictions. This could give HMRC access to records held by some overseas platforms serving UK residents. The agency estimates that the reporting measures could raise as much as £315 million by April 2030.
As previously reported, the new regime also introduced financial penalties for missing customer information. Customers who fail to provide required details can face a penalty of up to £300. Platforms can also receive penalties for incomplete or inaccurate reports.
Other countries are adopting related reporting systems. In related coverage, European Union rules have expanded tax data collection across crypto transactions, including some transfers involving external wallets.
Investors can correct unpaid crypto tax voluntarily
HMRC allows taxpayers to report previously unpaid crypto liabilities through its Cryptoasset Disclosure Service. The process can cover Capital Gains Tax and Income Tax arising from earlier financial years.
Taxpayers need transaction records from every platform and wallet used. Exchange statements alone may be insufficient because platforms do not always calculate pooled acquisition costs or track transfers between accounts belonging to the same person.
HMRC says unpaid domestic tax can result in penalties reaching 100% of the amount owed, plus interest. Offshore cases can attract higher penalties. The final charge depends on the taxpayer’s conduct, disclosure timing and cooperation.
The reporting regime does not create a new crypto tax. It gives HMRC more information for checking whether taxpayers followed rules that already applied. Investors receiving a warning should verify the agency’s calculations before confirming or disputing any liability.
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