UK sends 81,000 tax warnings to crypto holders

The British tax authority HMRC has sent more than 81,000 warning letters in the 2025/2026 tax year to crypto holders suspected of tax evasion. That is almost three times as many as the 27,714 letters sent in 2024. The sharp increase is linked to profits investors made during the bull market between 2022 and 2025, and shows that the British government is significantly tightening enforcement of crypto tax.

In brief:

• HMRC sent more than 81,000 warning letters to crypto holders, almost three times as many as in 2024.
• Those who fail to pay tax risk a fine of up to 100% of the amount owed, plus interest.
• Next year, HMRC will gain new powers to require foreign crypto companies to share customer data.

Bull market profits lead to additional assessments

According to Protos, the data came to light through a Freedom of Information request that the BBC reviewed. HMRC states that most unpaid tax stems from profits investors made during the crypto bull market from 2022 to 2025.

In the letters, the tax authority reminds crypto holders that selling, giving away, exchanging, or using crypto for purchases can lead to an obligation to pay capital gains tax. Those who fail to do so risk a fine of up to 100% of the amount owed, plus interest. For offshore transactions, that fine can be even higher.

New powers expected to raise £315 million

Neela Chauhan, partner at accounting firm UHY Hacker Young, told the BBC that many crypto traders are young, have little experience with the tax authority, and often assume that HMRC has limited visibility into their activities. According to her, the authorities suspect that a large proportion of investors are evading tax.

Next year, HMRC will gain new powers requiring foreign crypto companies to provide customer data. The tax authority estimates that these measures will generate a total of £315 million in additional tax revenue by 2030. Chauhan describes detecting unpaid tax among wealthy crypto investors as relatively straightforward once those powers take effect.

At the same time, the relationship between British banks and the crypto sector remains strained. A group of British parliamentarians who are part of a parliamentary working group on crypto and digital assets recently said they would raise objections with banks over the restrictions they impose on crypto companies. According to the parliamentarians, those restrictions may be one of the biggest obstacles to the growth of the British crypto sector.