UK Revenue and Customs issued 81,172 cryptocurrency tax warnings in one year

According to data released on August 20, the UK Revenue and Customs Service (HMRC) sent a total of 81,172 tax warning letters, emails and text messages to cryptocurrency investors in the 2025/26 fiscal year.

Summary

In fiscal year 2025/26, 81,172 warning letters were sent to cryptocurrency investors, up from 64,982 in the previous fiscal year.

HMRC views the sale, conversion, purchase and most gifts of cryptocurrencies as potentially taxable disposals by investors.

British service providers will start collecting customer information based on the Crypto-Asset Reporting Framework starting in January 2026.

Platforms must submit their first report covering 2026 activities to HMRC by May 31, 2027.

Unpaid domestic taxes may face fines of up to 100% of the tax payable, plus accrued interest.

This number rises from 64,982 in fiscal year 2024/25 and 27,714 in fiscal year 2023/24, with the latest total approximately 25% higher than the previous year and almost triple the record two years ago.

These data came from an information disclosure request. According to reports, HMRC suspects that some of the undeclared liabilities stem from gains generated by rising cryptocurrency prices between late 2022 and 2025.

HMRC has not disclosed how much unpaid taxes were identified in its latest warning operation. Warnings (often called "reminders") also do not automatically mean that the recipient is in default of taxes or faces a formal investigation.

HMRC Cryptographic Tax Warning for Possible Misreporting

When HMRC has information indicating that taxpayers may have underreported income or capital gains, the agency sends warning notices. Recipients are usually required to review their own records and correct any errors.

British taxpayers may be subject to capital gains tax when they sell cryptocurrency for legal tender, exchange one token for another, purchase goods with cryptocurrency, or give tokens to others. Gifts to spouses, civil partners and eligible charities are usually specified separately.

This tax applies to income rather than the total value of the transaction. Individuals are required to calculate their earnings in pounds sterling and deduct eligible acquisition costs. HMRC's official guidance also requires investors to keep records for each token pool.

Cryptocurrencies obtained through employment, mining, pledge, borrowing, or certain decentralized financial arrangements may generate income tax and national insurance obligations. Subsequent disposals may generate separate capital gains.

Reporting rules will provide more exchange data to HMRC

The UK introduced a crypto asset reporting framework on January 1, 2026. Starting from that date, relevant encryption service providers will need to collect customer identification information and transaction data.

The information required can include name, address, tax residence and tax identification number. Under rules issued by HMRC, service providers must submit their first report covering 2026 activities between January 1 and May 31, 2027.

The framework also supports participation in the exchange of information between tax jurisdictions. This could allow HMRC to gain access to records held by some overseas platforms serving UK residents. The agency estimates that these reporting measures could generate up to £ 315 million in revenue by April 2030.

According to previous reports, the new system also imposes financial penalties for missing customer information. Customers who fail to provide the required details could face fines of up to £ 300. Platforms may also be penalized for incomplete or inaccurate reports.

Other countries are also adopting relevant reporting systems. In related reports, EU rules have expanded the collection of tax data on cryptocurrency transactions, including partial transfers involving external wallets.

Investors can voluntarily correct unpaid crypto taxes

HMRC allows taxpayers to report previously undeclared crypto tax liabilities through its crypto asset disclosure service. This process can cover capital gains taxes and income taxes incurred in previous fiscal years.

Taxpayers are required to provide transaction records for each platform and wallet they use. Exchange statements alone may not be enough because platforms do not always calculate pooled acquisition costs or track transfers between accounts of the same person.

HMRC stated that unpaid domestic taxes could result in fines of up to 100% of the amount owed, plus interest. Offshore cases may face higher fines. The final cost depends on taxpayer behavior, timing of disclosure and degree of cooperation.

The reporting system does not create a new cryptocurrency tax, but rather provides HMRC with more information to check whether taxpayers are complying with existing rules. Investors who receive warnings should check the institution's calculations before confirming or questioning any liabilities.