The UK’s tax authority has sharply increased scrutiny of cryptocurrency investors, sending 81,172 warning letters, emails and text messages during the 2025/26 financial year over possible unpaid tax.
The figure is nearly three times the 27,714 warnings sent in 2023/24 and up from 64,982 in 2024/25, according to data obtained through a Freedom of Information request by accountancy firm UHY Hacker Young. The rise suggests HM Revenue and Customs is becoming more active in identifying investors whose reported tax affairs may not match their crypto activity.
Key Takeaways
- HMRC sent 81,172 crypto-related tax warnings in 2025/26, compared with 27,714 two years earlier.
- The warnings relate to possible undeclared income or capital gains from crypto transactions.
- UK crypto investors can trigger tax obligations when selling, swapping, spending or gifting digital assets.
- New reporting rules are expected to give HMRC significantly more information from crypto platforms from 2027.
HMRC Steps Up Scrutiny of Crypto Investors
The 2025/26 total represents an increase of roughly 25% from the 64,982 warnings issued in the previous financial year and a rise of more than 190% compared with 2023/24.
HMRC has not disclosed how much unpaid tax has been identified through the latest campaign. Receiving a warning also does not automatically mean that an investor owes money or is under formal investigation.
An HMRC spokesperson said the agency regularly contacts taxpayers to encourage them to check whether their filings are accurate.
“We regularly send letters to educate, remind or prompt customers to review their tax affairs, including customers who use crypto assets.”
The warnings are often described as “nudge letters” because they encourage recipients to check transactions and make corrections before HMRC escalates a case.
Accountants believe a significant part of the tax authority’s attention may be directed toward gains generated during the major cryptocurrency rally from late 2022 through 2025.
Bitcoin rose from around £14,000 in December 2022 to roughly £90,000 by October 2025. That rally could have created taxable gains for investors who sold or exchanged their holdings during the period.
Crypto Swaps Can Create Tax Liabilities
One source of confusion for investors is that UK tax obligations are not limited to converting cryptocurrency into pounds. A crypto disposal can occur when an investor sells tokens for fiat currency, swaps one cryptocurrency for another, uses digital assets to purchase goods or gives crypto to another person, although some transfers such as gifts between spouses can receive different treatment.
This means an investor who traded Bitcoin for Ether, for example, may still have created a taxable event even if no money ever entered their bank account.
Capital Gains Tax is based on the profit made rather than the full transaction amount. Investors therefore need records showing acquisition costs, disposal values, fees and transaction dates.
Crypto received through activities such as employment, mining, staking, lending or certain decentralized finance arrangements may also be treated differently and can create Income Tax obligations.
Neela Chauhan, partner at UHY Hacker Young, said some crypto users may underestimate how much visibility tax authorities have over their transactions.
“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.”
New Reporting Rules Will Expand HMRC’s Visibility
HMRC is expected to gain much broader access to crypto transaction data through new international reporting arrangements. The UK introduced the Cryptoasset Reporting Framework from Jan. 1, 2026, requiring covered service providers to collect customer identity and transaction information. The first reports covering 2026 activity are expected to be submitted between January and May 2027.
The framework could also allow information sharing between participating jurisdictions, giving HMRC access to data from some overseas crypto platforms used by UK residents.
Chauhan warned that these expanded data sharing arrangements could make future investigations much easier.
“Once HMRC has this data, tax investigations into cryptocurrency investors will be like shooting fish in a barrel.”
The government estimates the reporting measures could generate up to £315 million in additional tax revenue by April 2030.
Conclusion
HMRC’s decision to send more than 81,000 crypto tax warnings in a single financial year shows how quickly digital asset taxation is moving into mainstream enforcement.
The increase does not mean every recipient has underpaid tax, but it does signal that HMRC is paying much closer attention to crypto transactions and comparing available information with taxpayer filings. With broader exchange reporting due to expand in 2027, investors who have previously sold, swapped or earned cryptocurrency may have less room to assume their activity will remain unnoticed. Keeping complete records and correcting any inaccurate filings is becoming increasingly important as the UK strengthens its crypto tax oversight.
