UK Crypto Holders Receive Warning Letters in Tax Crackdown
HMRC sends over 81,000 warning letters to crypto holders who may owe capital gains tax
The UK's tax authority, HM Revenue and Customs (HMRC), has sent more than 81,000 letters to cryptocurrency holders warning them that they may owe capital gains tax. This move is part of a crackdown on tax evasion in the crypto industry. According to a Freedom of Information request, the number of letters sent by HMRC has almost tripled since 2024.
## Background Investors who fail to declare profits from selling cryptocurrencies, even if they exchange one cryptocurrency for another, could face fines or prosecution. The tax authority is taking a closer look at crypto investors, and new powers due to be given to HMRC next year will make it easier to target wealthy crypto investors.
The number of warning letters sent by HMRC has increased significantly over the past year. In the 2025-26 financial year, HMRC sent 81,172 warning letters, emails, and text messages to crypto investors it suspects may have underpaid tax. This is a significant increase from the 27,714 letters sent in the 2023-24 financial year.
## Tax Evasion Concerns There is a concern amongst tax authorities that cryptocurrency investment is rife with tax evasion. Many traders are young and have had little previous exposure to HMRC, and often work under the assumption that HMRC has limited visibility over their activities. However, HMRC is committed to helping people pay the right amount of tax, and the vast majority of people do pay their fair share.
| Financial Year | Number of Warning Letters | | --- | --- | | 2023-24 | 27,714 | | 2025-26 | 81,172 |
## Upcoming Powers From March 2027, cryptocurrency platforms located in dozens of countries outside the UK will be obliged to share information about their customers with tax authorities. This will make it easier for HMRC to target individuals who owe tax. The tax office estimated that the changes would help raise up to £315m by April 2030, which is the same amount needed to fund more than 10,000 newly qualified nurses for a year.
Accountants are urging investors to check whether they owe money, as the new powers will make it easier for HMRC to investigate cryptocurrency investors. Once HMRC has the data, tax investigations into cryptocurrency investors will be like shooting fish in a barrel, according to Neela Chauhan, partner at UHY Hacker Young. The value of cryptocurrencies such as Bitcoin and Ethereum has fallen in the past year, but HMRC suspects there are still large amounts of unpaid capital gains from the rise in cryptocurrency values between December 2022 and October 2025.
