UK taxman sent 81,172 crypto warnings last year

The UK's tax authority issued 81,172 warnings to crypto investors in the 2025/26 financial year, a 25% jump from the prior year and nearly triple the total from two years earlier.

HM Revenue and Customs sent the letters, emails and text messages as part of its push to collect unpaid taxes on crypto trading gains. The 2024/25 total was 64,982, according to figures released under a Freedom of Information request obtained by accounting firm UHY Hacker Young and reported by the BBC.

The warnings, known as nudge letters, do not automatically mean the recipient owes money or faces a formal investigation. HMRC sends them when information available to the agency suggests a taxpayer may have omitted income or capital gains. Recipients are asked to review their records and correct any errors.

HMRC suspects some undeclared liabilities came from gains accumulated as crypto prices rose between late 2022 and 2025, the BBC reported.

UK taxpayers owe Capital Gains Tax when they sell crypto for fiat currency, exchange one token for another, buy goods with crypto or give tokens away. Gifts to spouses, civil partners and qualifying charities are generally treated differently.

The tax applies to gains, not the total transaction value. Individuals must calculate proceeds in pounds sterling and deduct eligible acquisition costs. HMRC guidance requires investors to keep 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.

The UK introduced the Cryptoasset Reporting Framework on Jan. 1, 2026, replacing the earlier nudge-letter approach with a formal data-collection regime. Covered crypto service providers must collect identifying information and transaction data from customers, including names, addresses, tax residences and tax identification numbers.

Providers must submit their first reports covering 2026 activity between Jan. 1 and May 31, 2027, under HMRC's published rules. The framework also supports information exchanges between participating tax jurisdictions, which could give HMRC access to records held by overseas platforms serving UK residents.

HMRC estimates the reporting measures could raise as much as £315 million by April 2030.

The regime also introduced financial penalties for missing customer information. Customers who fail to provide required details face a penalty of up to £300. Platforms can also receive penalties for incomplete or inaccurate reports.

HMRC allows taxpayers to report previously unpaid crypto liabilities through its Cryptoasset Disclosure Service, covering Capital Gains Tax and Income Tax from earlier financial years. Taxpayers need transaction records from every platform and wallet. Exchange statements alone may be insufficient because platforms do not always calculate pooled acquisition costs or track transfers between accounts held by the same person.

Unpaid domestic tax can result in penalties reaching 100% of the amount owed plus interest. Offshore cases 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.