81,000 warning letters sent to crypto holders in HMRC tax crackdown

The UK tax authority, HM Revenue and Customs (HMRC), issued over 81,000 letters in the past year to cryptocurrency holders, warning them that they may owe capital gains tax. This significant increase in letters sent by HMRC has nearly tripled since 2024. Taxpayers could face fines or prosecution if they do not declare profits from selling cryptocurrencies, even if they exchange one cryptocurrency for another.

Upcoming powers for HMRC next year are expected to make it easier to target wealthy crypto investors, as one analyst suggests these investigations will be straightforward. Tax authorities assume cryptocurrency investments are commonly involved in tax evasion, according to Neela Chauhan, a partner at UHY Hacker Young, who conducted the Freedom of Information (FOI) request.

Many young traders often underestimate HMRC's visibility over their activities. In the 2025-26 financial year, HMRC sent 81,172 warning letters, emails, and text messages to suspected crypto investors who may have underpaid tax. An HMRC spokesperson stated that they are committed to helping people pay the correct amount of tax, regularly sending letters to educate, remind, or prompt customers to review their tax affairs, including those who use crypto assets.

Although the value of cryptocurrencies like Bitcoin and Ethereum has dropped recently, HMRC suspects there are still substantial amounts of unpaid capital gains from their growth between December 2022 and October 2025. The price of Bitcoin surged from approximately £14,000 to £90,000 during this period. Accountants advise investors to verify if they owe any money, as new powers will facilitate HMRC's ability to target individuals.

Starting from March 2027, cryptocurrency platforms in numerous countries outside the UK will be required to share information about their customers with tax authorities. This will significantly aid HMRC in its efforts to collect taxes, as they expect investigations into cryptocurrency investors to become much simpler. The new powers are estimated to generate up to £315 million by April 2030 - an amount equivalent to funding over 10,000 newly qualified nurses for a year.

Once HMRC acquires this data, tax investigations into cryptocurrency investors will be relatively straightforward, in the words of Ms. Chauhan. Bitcoin's price has recently fallen to around £48,000.