HM Revenue and Customs sent roughly 81,000 warning letters, emails and text messages to UK cryptocurrency investors during the 2025/26 financial year, according to figures obtained by accountancy group UHY Hacker Young and reported on 20 August 2026. The latest total of 81,172 warnings is about 25% higher than the 64,982 recorded in 2024/25 and nearly three times the 27,714 sent in 2023/24.
The warnings, often called nudge letters, are not formal tax assessments. HMRC sends them when information suggests a return may be missing or inaccurate, giving recipients a chance to review their records and disclose unpaid tax before an enquiry begins. HMRC reportedly suspects some undeclared liabilities arose from gains accumulated as crypto prices increased between late 2022 and 2025. Neela Chauhan, a partner at UHY Hacker Young, said younger traders may not realise HMRC can see their activity, adding that the tax treatment of cryptocurrency in the UK is complex and many individuals do not fully understand their reporting obligations.
Under HMRC’s guidance, a taxable disposal can include selling crypto for pounds, exchanging one token for another, spending tokens on goods or services and most gifts. For example, swapping bitcoin for ether may create a capital gain even if no cash reaches a bank account. Staking rewards can be taxed as income unless the activity amounts to a trade, and some lending or DeFi arrangements may trigger disposals.
Reporting pressure is set to increase further. The UK’s Cryptoasset Reporting Framework came into force on 1 January 2026, requiring covered crypto service providers to collect identifying information and transaction data. The first reports, covering the 2026 calendar year, must be submitted between 1 January and 31 May 2027. The framework also enables information exchange through the OECD, potentially giving HMRC access to records from overseas platforms serving UK residents. HMRC estimates the reporting measures could raise as much as £315 million by April 2030.
Penalty exposure depends on taxpayer conduct, disclosure timing and whether the matter is offshore. Unprompted inaccuracy penalties can range from zero to 30% for careless errors and up to 100% for deliberate and concealed errors, with offshore cases potentially attracting higher charges. Customers who fail to provide required information can face penalties of up to £300, while platforms may be penalised for incomplete or inaccurate reports. Investors can use HMRC’s Cryptoasset Disclosure Service to voluntarily correct previously unpaid tax liabilities.
