Key Takeaways
- HMRC sent 81,172 tax warnings to crypto investors in 2025-26, almost three times the number recorded two years earlier.
- Selling cryptocurrency, spending it, or swapping one token for another can trigger UK capital gains tax.
- HMRC is targeting undeclared profits generated during Bitcoin’s surge from roughly £14,000 to £90,000 between 2022 and 2025.
HM Revenue and Customs sent more than 81,000 warnings to cryptocurrency holders during the past financial year as the UK tax authority intensifies efforts to uncover undeclared capital gains.
Data obtained through a Freedom of Information request showed that HMRC sent 81,172 letters, emails, and text messages to investors suspected of underpaying tax in 2025-26.
That compares with 27,714 warnings during 2023-24, meaning the number has almost tripled in two years.
Investors could face penalties or prosecution if they fail to report taxable profits. Crucially, UK rules may treat exchanging one cryptocurrency for another as a disposal, even when no pounds return to the investor’s bank account.
HMRC Targets Profits From the Crypto Bull Market
The crackdown appears focused partly on gains accumulated during the market rally between December 2022 and October 2025.
Bitcoin rose from approximately £14,000 to £90,000 over that period, potentially generating substantial taxable profits for UK investors.
Although its price has since fallen to around £48,000, losses after the rally do not automatically erase tax owed on earlier disposals.
“There is the expectation amongst tax authorities that cryptocurrency investment is rife with tax evasion,” said Neela Chauhan, a partner at UHY Hacker Young, which submitted the FOI request.
Chauhan said many traders are young, have limited previous experience with HMRC, and mistakenly assume the authority cannot see their transactions.
HMRC said the warnings aim to educate customers and encourage them to review their tax affairs rather than serving solely as enforcement notices.
Crypto Swaps Can Trigger Capital Gains Tax
UK investors generally need to calculate gains when selling crypto for pounds, spending it, or swapping one token for another.
For the current regime, capital gains above the £3,000 annual exempt amount may be subject to tax.
Basic-rate taxpayers generally pay 18% on taxable crypto gains, while higher- and additional-rate taxpayers pay 24%.
The calculation can become complicated for frequent traders because every disposal requires records showing acquisition costs, proceeds, and transaction fees.
Investors can report gains through Self Assessment. The online filing and payment deadline normally falls on Jan. 31 following the end of the relevant tax year.
Overseas Exchanges Will Begin Sharing Customer Data
HMRC’s visibility will expand significantly from March 2027, when crypto platforms across dozens of jurisdictions must begin sharing customer information with tax authorities.
The international reporting regime will make it easier for HMRC to compare exchange records with individual tax returns and identify discrepancies.
“Once HMRC has this data, tax investigations into cryptocurrency investors will be like shooting fish in a barrel,” Chauhan warned.
The government estimates the measures could raise as much as £315 million by April 2030.
Investors who have previously omitted crypto gains may therefore have a shrinking window to review their records and correct inaccurate returns before HMRC receives more comprehensive trading data.
