HM Revenue and Customs issued more than 81,000 warning letters, emails and text messages to cryptocurrency holders during the 2025-26 financial year, alerting them that they may owe capital gains tax on their digital asset transactions. The figure, revealed through a Freedom of Information request, represents nearly three times the 27,714 notices sent in 2023-24. Investors who fail to declare gains, including those made by swapping one cryptocurrency for another, could face financial penalties or prosecution.
How many warning letters has HMRC sent?
HMRC dispatched 81,172 letters, emails and texts in the 2025-26 tax year to individuals it suspects may have underpaid tax on crypto profits, up sharply from 27,714 two years earlier. The Freedom of Information request behind these figures was submitted by UHY Hacker Young, whose partner Neela Chauhan says the surge reflects growing scrutiny of the sector.
There is the expectation amongst tax authorities that cryptocurrency investment is rife with tax evasion
A lot of the traders are young, have had little previous exposure to HMRC and often work under the assumption that HMRC has limited visibility over their activities.
Why is HMRC ramping up enforcement now?
According to the Institute of Chartered Accountants in England and Wales, HMRC's Wealthy and Mid-sized Business Compliance team is running a targeted outreach campaign between July 2026 and March 2027, contacting suspected underpayers by letter, email and text. The same report notes that HMRC is also exploring sending compliance messages directly through its official app as part of this push. Accountants are urging crypto holders to review their tax position now, given that new information-sharing rules will make it far easier for the tax authority to cross-check individual trading histories.
What powers will HMRC gain, and when?
From March 2027, cryptocurrency platforms based in dozens of countries outside the UK will be required to pass customer information to tax authorities. This builds on domestic measures already under way: according to government guidance on the Cryptoasset Reporting Framework, UK-registered cryptoasset service providers must begin collecting customer data from 1 January 2026, with their first reports covering that year due to HMRC between 1 January and 31 May 2027. Separately, HMRC announced in July 2025 that from January 2026 crypto users would need to supply providers with personal details including their name, address, date of birth, tax residence and National Insurance number or tax reference, according to a HMRC press release issued at the time.
HMRC said the new powers would force what it called
crypto bros to pay their fair share of tax
The tax authority has estimated the measures could raise up to £315m by April 2030, an amount it says would be sufficient to fund more than 10,000 newly qualified nurses for a year. Ms Chauhan warned of the consequences for investors once the data-sharing regime takes full effect.
Once HMRC has this data, tax investigations into cryptocurrency investors will be like shooting fish in a barrel
Separately, guidance published on the government's website warns that failure to pay tax owed on crypto assets can result in a penalty of up to 100% of the tax due, in addition to interest charges, according to official HMRC guidance for cryptoasset users.
How does capital gains tax apply to crypto?
Under existing rules, each sale, trade or conversion of a cryptocurrency can count as a taxable disposal, according to HMRC's own guidance on selling cryptoassets. A briefing from Grant Thornton notes that UK crypto gains are subject to capital gains tax, with an annual tax-free exemption of £3,000 for the 2026/27 tax year, and rates of 18% or 24% depending on the taxpayer's income band.
What happened to cryptocurrency prices during this period?
The value of major cryptocurrencies has fallen over the past year, though HMRC believes substantial capital gains remain undeclared from the sharp rise in prices between December 2022 and October 2025. During that period, the price of Bitcoin climbed from around £14,000 to roughly £90,000. Over the past year, however, Bitcoin's price has dropped back to around £48,000, reducing paper gains for some investors while leaving others still sitting on substantial profits from the earlier rally.
What happens next?
HMRC's targeted contact campaign aimed at suspected crypto underpayment is set to continue through to March 2027, according to the Institute of Chartered Accountants in England and Wales. Meanwhile, UK cryptoasset service providers face a firm deadline to submit their first customer reports under the domestic reporting framework, with the window running from 1 January to 31 May 2027, as confirmed in official government guidance. These overlapping deadlines mean investors who have not yet reviewed their historic transactions have a narrowing window to do so before HMRC gains far greater visibility into their trading activity.
Key Facts
- HMRC sent 81,172 crypto tax warning letters, emails and texts in 2025-26, up from 27,714 in 2023-24
- From March 2027, overseas crypto platforms must share customer data with UK tax authorities
- UK cryptoasset providers must submit first domestic reports between 1 January and 31 May 2027
- Unpaid crypto tax can attract penalties of up to 100% of the tax owed, plus interest
- HMRC estimates the crackdown could raise up to £315m by April 2030
