HM Revenue and Customs has sharply increased its focus on cryptocurrency users, sending more than 81,000 warning letters during the 2025-2026 financial year to people suspected of underpaying tax on digital asset activity. The total is almost three times the 27,714 letters sent in 2024, according to reporting cited from a freedom of information request.

HMRC links much of the suspected shortfall to profits made during the crypto market upswing between 2022 and 2025. The campaign signals a broader effort by the UK tax authority to push crypto holders to review past transactions and settle liabilities before penalties escalate.

What HMRC is targeting

The warning letters are aimed at crypto holders whose activity may have triggered tax obligations that were not fully reported or paid. HMRC has stressed that tax can arise not only when crypto is sold for cash, but also when it is given away, exchanged for another token, or used to buy goods and services.

That broad definition means taxable events can occur even when no traditional bank transfer is involved. The latest round of letters suggests the agency believes a substantial number of users either misunderstood those rules or failed to account for gains made during the recent bull market.

Penalties and compliance risks

Recipients have been reminded that failing to pay tax due on crypto gains can lead to penalties of up to 100% of the unpaid amount, plus interest. HMRC also indicated that offshore transfers may bring even more serious consequences, underscoring its concern about funds and assets moving beyond the immediate reach of domestic reporting systems.

Specialists cited in the coverage said many crypto traders are relatively young and may have limited experience dealing with HMRC. Some may also assume the authority has little visibility into crypto transactions, a belief that could leave them exposed if past filings do not match trading records or exchange data.

New powers expected from 2027

HMRC is also preparing for a stronger enforcement toolkit. From 2027, it expects to receive new powers that would allow it to require offshore firms to share customer information. Officials believe those measures could make it easier to identify unpaid liabilities, particularly among wealthier holders using platforms or structures outside the UK.

The government expects the expanded reporting regime to raise about £315 million by 2030. That figure reflects not only direct tax collection but also the impact of greater visibility over accounts and transactions that may previously have been harder to trace.

Wider pressure on the UK crypto sector

The tax crackdown is unfolding alongside a separate industry concern: access to banking services. Crypto firms have reportedly faced restrictions or delays when trying to move money through banks, adding another layer of friction for businesses operating in the sector.

Parliament and industry groups are pressing banks to explain how those policies are being applied and whether upcoming crypto rules will change their approach. Their argument is that firms should be assessed on their individual risk profiles rather than treated as a single high-risk category.

What comes next

For now, the clearest confirmed step is HMRC’s ongoing compliance push through warning letters and the prospect of tougher data-gathering powers from 2027. The immediate issue for affected taxpayers is whether past sales, swaps, gifts or crypto-funded purchases created liabilities that were not properly declared.

At the policy level, attention will also remain on how banks handle crypto-related transfers and on whether the planned information-sharing powers materially improve HMRC’s ability to detect unpaid tax. Together, those developments point to closer oversight of both individual holders and the wider digital asset industry in the UK.

Source: cryptopotato.com