HMRC Sent 81,000 Crypto Warning Letters: Are You Affected?

Tax Queen

Tax Expert @ Pie

3 min read

If you've bought, sold, or swapped cryptocurrency in the past few years, HMRC may already have you on its radar. Newly released figures show that HMRC sent more than 81,000 warning letters, emails, and texts to suspected crypto investors in the 2025-26 tax year, almost three times the number sent just two years earlier. If you've never declared crypto gains on a Self Assessment return, or you're not sure whether you need to, this is worth ten minutes of your time today.

How Many Letters Has HMRC Sent?

Data obtained through a Freedom of Information request and reported by the BBC shows HMRC issued 81,172 so-called "nudge letters" to suspected crypto investors in the past year, up from 27,714 in 2023-24, an almost threefold increase in two years. The jump has been building steadily: HMRC is understood to have sent around 65,000 of these letters in 2024-25, so the trend has been climbing every single year since it began.

These letters don't mean HMRC already has proof you've underpaid tax. They're a prompt, giving you the chance to review your position and come forward voluntarily before anything more formal starts. But the volume tells its own story: HMRC increasingly has visibility into who's trading crypto and roughly how much they might owe, and it's using that visibility at scale. The tax office reportedly expects this kind of compliance activity to help recover as much as £315 million by April 2030, comparable to the cost of funding over 10,000 newly qualified nurses for a year.

Neela Chauhan, a partner at the accountancy firm that obtained the data, has pointed out that many crypto traders are young and have had little previous contact with HMRC, often working on the assumption that HMRC has limited visibility over their activity. That assumption is becoming less safe with every letter that goes out. Our guide on whether you pay tax on crypto in the UK breaks down exactly which activities HMRC expects you to declare, so you can check your own position before deciding whether you need to act.

Why This Is Happening Now

The timing lines up with a sharp run-up in crypto values. Bitcoin rose from around £14,000 in December 2022 to roughly £90,000 by October 2025, and HMRC suspects a meaningful amount of capital gains from that period were never reported. Prices have since pulled back, with Bitcoin trading down to around £48,000 over the past year, but that fall doesn't erase any tax owed on gains that were locked in while prices were high.

If you sold, swapped, or spent crypto at any point during that rally, the gain was realised at that moment, regardless of what the price has done since Crypto profits fall under Capital Gains Tax in exactly the same way as shares or property.

For the 2026/27 tax year, everyone gets a £3,000 tax-free allowance before CGT applies, after which gains are taxed at 18% for basic-rate taxpayers or 24% for higher and additional-rate taxpayers.

Crucially, a taxable "disposal" isn't limited to cashing out to pounds: selling for fiat, swapping one token for another, spending crypto on goods or services, and even gifting it (other than to a spouse) can all trigger a CGT bill. Our guide on whether you owe tax if you haven't sold your crypto explains this distinction in more depth, since it's the single most common area where investors get caught out.

New Powers Are Coming

HMRC's ability to check your figures against what platforms actually record is only going to improve. Under the UK's rollout of the international Cryptoasset Reporting Framework (CARF), UK-based crypto platforms have already been required to start collecting detailed user and transaction data since 1 January 2026.

The first formal reports covering that data are due to HMRC by 31 May 2027, and from 2027 onwards the UK will begin exchanging this information automatically with dozens of other tax authorities worldwide, closing the gap that let offshore or foreign-platform activity go unseen. Neela Chauhan has warned that once HMRC has this data in hand, pursuing investigations into cryptocurrency investors could become as easy as, in her words, "shooting fish in a barrel."

Some platforms already share data with HMRC today, well ahead of CARF. Our explainer on which payment and crypto platforms report to HMRC covers what's already being shared and what's changing, so you know exactly how much visibility HMRC currently has.

The Token-to-Token Blind Spot

Of everything covered here, this is the point that trips up the most investors. If you swapped Ethereum for a smaller altcoin at any point, moved funds between coins to chase a better return, or used a decentralised exchange to rebalance a portfolio, each of those swaps was potentially a taxable disposal in its own right, even though no pounds ever touched your bank account.

HMRC treats it the same as if you'd sold the first coin for cash and immediately bought the second. If you've been trading actively without tracking this, it's worth going back through your transaction history rather than assuming that only withdrawals to a bank account count.

What This Means for You

If you've had any crypto activity, selling, swapping, staking, or earning rewards, and you haven't reported it, the safest move is to review your history now rather than wait for a letter to arrive.

Voluntary disclosure ahead of an HMRC enquiry generally results in lower penalties than being caught first, and it takes the pressure off. If you're unsure whether a specific gain needs declaring, or whether losses elsewhere in your portfolio could offset it, it's worth getting this sorted before your next filing deadline rather than scrambling in January. Our step-by-step guide on how to report crypto gains on your Self Assessment return walks through exactly what HMRC needs from you and how to work out your figures.

This is exactly the kind of situation self-assessment software is built for. Pie Tax pairs you with a real tax expert who can help you work out what you actually owe on crypto gains, alongside any other income you need to declare, without you having to become a tax specialist yourself.

Where Pie Tax Comes In

Why Pie Tax exists is simple: crypto tax rules are genuinely complicated, and getting them wrong, even by accident, can be costly. You connect your accounts, a tax expert reviews your position including any crypto disposals, and your return is prepared and checked before it goes anywhere near HMRC. That takes the guesswork out of tricky areas like token-to-token swaps, staking income, and working out which of your gains actually fall inside your £3,000 allowance.

What To Do Next

HMRC's crypto crackdown isn't going away, and the incoming international data-sharing rules mean the odds of an unreported gain going unnoticed are shrinking fast. If you've traded crypto and aren't confident your tax affairs are in order, now is a far better time to check than after a letter lands on your doormat.

Getting started takes a few minutes. Sign up today for free and let a tax expert help you work out exactly where you stand, before HMRC gets there first.

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