Tax warning letters sent to crypto investors by HMRC

HMRC sends a crypto tax warning letter roughly every eight minutes, according to Freedom of Information (FOI) data obtained by online broker BrokerChooser. HMRC issued 64,982 crypto-related nudge letters in the 2024-25 tax year, bringing the total since 2020 to 101,024.

Illustrating the speed of growth of crypto investments and HMRC’s counter activity, in the previous tax year 2023-24 there were just under 28,000 crypto nudge letters. In 2022-23 not a single crypto warning letter was sent, according to the FOI.

This comes as an estimated 4.5m crypto holders in the UK could face unexpected penalties in 2026, as HMRC ramps up enforcement on digital assets. The latest surge in activity followed concerns one in four investors who failed to report cryptocurrency holdings in 2021 said they were unaware that crypto was taxable.

The latest HMRC campaign is part of HMRC’s regular activity to ensure compliance with capital gains tax (CGT) rules with over 104,000 letters sent out in 2024-25, with crypto accounting for 62.4%, up from 37% the previous year when only around 74,000 letters were sent out.

The FOI request shows that crypto investors have become one of HMRC’s main CGT compliance targets, outnumbering traditional assets such as stocks and property, warned BrokerChooser.

Between 2020 and 2025, HMRC issued 40 times more warning letters relating to cryptoassets than to shares and securities, with far fewer sent to property landlords and taxpayers with overseas assets.

HMRC CGT nudge letters by category

Source: BrokerChooser FOI request HMRC, data as of March 2026

Tax compliance

Crypto is taxed on gains, with complex record keeping requirements to ensure the correct value at time the gain or loss is recorded for tax purposes. Details have to be disclosed in annual self assessment tax returns, with the next filing deadline of 31 January for the 2025-26 tax year.

Adam Nasli, head broker analyst at BrokerChooser, said: ‘While there may be honest mistakes, HMRC can still impose penalties if you did not take “reasonable care” to check your tax liability. However, while crypto enforcement has exploded in 2024/25, it remains likely that many letters may have been issued for unintentional non-compliance.

‘To ensure you stay tax-compliant in 2026, we urge investors to keep detailed records of all purchases, sales, swaps, transfers and payments made using cryptocurrency. Many investors assume small trades don’t count, but even simple swaps can trigger tax liabilities.’

Nasli urged investors to ‘track’ their investments in 2026:

• Track every crypto transaction
• Remember that token swaps can trigger tax
• Account for everyday crypto use
• Check HMRC guidance
• Keep mistakes transparent

The lack of oversight of crypto compared with traditional investment routes such as stocks and shares, bonds, and property, makes compliance issues complex. It is important to note that new global crypto platform exchange regulations are now in force which mean crypto platforms will have to share transaction data with tax jurisdictions globally.

Nasli added: ‘Unlike traditional assets, many cryptocurrencies are held offshore and traded on largely unregulated platforms, exposing investors not only to market risk but also to elevated fraud and counterparty risks.

‘Where spot exposure is required, using regulated intermediaries is generally safer than relying on crypto exchanges, and investors should focus on major, established cryptocurrencies rather than smaller, less liquid tokens.’

Source - Business & Accountancy Daily

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