HM Revenue and Customs (HMRC) has issued over 81,000 letters in the last year to holders of cryptocurrency, warning them about potential liabilities for capital gains tax. This number reflects a significant increase, nearly tripling since 2024, as revealed in a recent Freedom of Information (FOI) request obtained by the BBC.
Investors are cautioned that failure to declare profits from the sale of assets—even when exchanging one cryptocurrency for another—can result in fines or even legal action. New legislation set to empower HMRC next year is expected to streamline efforts targeting affluent cryptocurrency investors. An industry analyst remarked that these investigations could be as straightforward as “shooting fish in a barrel.”
“Tax authorities are under the impression that cryptocurrency investments are heavily associated with tax evasion,” stated Neela Chauhan, a partner at UHY Hacker Young, the firm that conducted the FOI survey.
The stark contrast in the number of warning communications is evident: during the financial year 2025-26, HMRC dispatched 81,172 notifications—letters, emails, and text messages—to crypto investors suspected of underreporting taxes. In comparison, just 27,714 such communications were sent in the previous year, 2023-24.
An HMRC spokesperson commented, “We are dedicated to ensuring that individuals pay the correct amount of tax, which the majority do. We frequently send out letters to educate, remind, or prompt customers, including those involved with crypto assets, to assess their tax situations.”
Editor’s Take
This surge in communications from HMRC underscores a growing vigilance towards the cryptocurrency sector and its tax implications. For users, this may serve as a wake-up call to ensure compliance and avoid penalties. Businesses and developers should also prepare for increased scrutiny, as regulatory expectations continue to evolve.
Source: www.bbc.co.uk
