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Point of Focus
- HMRC sent 81,172 crypto tax warnings in 2025-2026.
- Authorities are targeting undeclared gains from the 2022–2025 crypto bull market.
- Investors who fail to report taxable gains can face substantial penalties and interest.
The UK’s tax authority has stepped up its crackdown on cryptocurrency investors, sending more than 81,000 warnings to people it suspects may have failed to pay tax on their digital asset gains.
HM Revenue and Customs (HMRC) sent 81,172 letters, emails and text messages to crypto investors during the 2025/26 financial year, according to data obtained through a Freedom of Information request by accounting firm UHY Hacker Young.
That figure has nearly tripled from 27,714 warnings in 2023/24, highlighting HMRC’s growing focus on crypto-related tax compliance.
The crackdown comes as authorities prepare to gain access to significantly more information about UK investors using overseas crypto platforms from March 2027.
HMRC targets crypto gains from the bull market
HMRC believes investors may still owe substantial amounts of tax on gains generated during the crypto bull market between late 2022 and 2025.
Bitcoin climbed from around £14,000 (around $19,000) in December 2022 to approximately £90,000 (approximately $122,000) by October 2025, creating potentially large taxable gains for investors who sold or disposed of their holdings during the rally.
UK HMRC Sent More Than 81,000 Crypto Tax Warning Letters in 2025/26
According to Protos, the UK’s HM Revenue and Customs (HMRC) sent more than 81,000 warning letters to crypto holders suspected of unpaid taxes during the 2025/26 financial year, nearly triple the 27,714 letters… pic.twitter.com/V1S0tG2zoT
— Wu Blockchain (@WuBlockchain) August 21, 2026
Under UK rules, crypto investors can trigger capital gains tax obligations not only by selling digital assets for pounds but also by exchanging one cryptocurrency for another, gifting tokens or using them to purchase goods and services.
Investors who fail to declare taxable gains can face interest and penalties. In serious cases, HMRC can impose penalties reaching 100% of the unpaid tax, while deliberate tax evasion can potentially result in prosecution.
Offshore exchanges face new reporting rules
HMRC’s ability to identify undeclared crypto profits is set to expand substantially from March 2027.
Crypto platforms across dozens of overseas jurisdictions will have to share customer information from the 2026 calendar year with tax authorities under new international reporting arrangements (called Crypto-Asset Reporting Framework or CARF), giving HMRC greater visibility into assets held outside the UK.
"There is the expectation amongst tax authorities that cryptocurrency investment is rife with tax evasion," says Neela Chauhan at UHY Hacker Young which found that HMRC sent over 81,000 letters in past year warning holders they may owe capital gains tax.
https://t.co/jZoaujDAi7— Gavin Lumsden (@FundFanatic) August 20, 2026
Neela Chauhan, partner at UHY Hacker Young, said many younger crypto traders have limited experience dealing with HMRC and may incorrectly assume authorities cannot see their activity.
Once authorities receive the additional exchange data, Chauhan expects HMRC to find it significantly easier to identify discrepancies between investors’ reported tax positions and their actual crypto transactions.
The government estimates the expanded reporting measures could generate up to £315 million in additional tax revenue by April 2030.
Crypto swaps can also trigger tax bills
One potential source of unpaid tax is confusion over what counts as a taxable crypto transaction.
Investors do not necessarily need to withdraw money into a bank account to incur a capital gains tax liability. Swapping Bitcoin for Ether, for example, can count as a disposal for UK tax purposes.
For the current regime cited in the reports, individuals have a £3,000 annual capital gains tax allowance. Gains exceeding that threshold can face tax depending on the investor’s circumstances and applicable rates.
HMRC said it regularly contacts taxpayers to educate them, remind them of their obligations and encourage them to review their affairs.
The 81,172 warnings suggest crypto has become an increasingly important part of that effort. With overseas exchanges soon providing authorities with more customer data, investors who previously assumed their digital asset transactions were difficult for HMRC to trace could face considerably greater scrutiny.
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