UK tax authority sends 81,000 warning letters to crypto holders over unpaid taxes

UK tax authority triples crypto tax warning letters

The UK’s tax authority, HM Revenue and Customs (HMRC), sent more than 81,000 warning letters to crypto holders during the 2025/2026 financial year. This is a sharp increase from the 27,714 letters sent in 2024. The letters warn recipients they may owe taxes on their crypto activities.

HMRC believes most of the unpaid taxes come from profits made during the crypto market surge between 2022 and 2025. The letters remind crypto users that selling, exchanging, or using crypto to make purchases can trigger capital gains tax. If taxes are not paid, penalties can reach up to 100% of the owed amount, plus interest.

Key details from the HMRC crackdown

• 81,000 warning letters sent in 2025/2026, up from 27,714 in 2024.
• HMRC suspects unpaid taxes stem from the 2022-2025 crypto bull market.
• Penalties for unpaid taxes can reach 100% of the owed amount, with added interest.
• New powers next year will force offshore crypto firms to share customer data with HMRC.
• HMRC expects to raise £315 million by 2030 from these new measures.

Why HMRC is targeting crypto holders

Neela Chauhan, a partner at accounting firm UHY Hacker Young, told the BBC that many crypto traders are young and may not realize HMRC can track their activities. She said tax authorities suspect widespread tax evasion in the crypto space and believe tracking wealthy crypto users will become much easier once HMRC gains new powers in 2027.

These new powers will require offshore crypto firms to share customer information with HMRC. The tax authority estimates this will help recover £315 million in unpaid taxes by 2030.

UK banks still restrict crypto businesses

UK banks continue to create challenges for crypto businesses. A group of MPs recently complained to banks about restrictions that make it difficult for crypto firms to open bank accounts. The MPs argue these restrictions are a major barrier to growth for the UK’s crypto and digital asset industry.

What is confirmed

• HMRC sent 81,000 warning letters to crypto holders in 2025/2026.
• The number of letters tripled compared to 2024.
• HMRC believes unpaid taxes are linked to the 2022-2025 crypto bull market.
• New powers in 2027 will require offshore crypto firms to share customer data with HMRC.
• HMRC expects to raise £315 million by 2030 from these measures.

What is still unclear

• How many of the 81,000 letters will result in actual tax payments or penalties.
• The exact methods HMRC will use to enforce the new offshore data-sharing rules.
• Whether UK banks will ease restrictions on crypto businesses in response to MPs' complaints.

Why this matters for crypto holders

This crackdown shows HMRC is increasing its focus on crypto-related tax compliance. Crypto holders in the UK should be aware that selling, exchanging, or using crypto for purchases may trigger tax obligations. The new powers in 2027 will make it harder to avoid taxes by using offshore crypto services.

Sources

• Protos
• BBC