HM Revenue and Customs (HMRC) has significantly increased its scrutiny of UK cryptocurrency users during the 2025-2026 financial year, sending more than 81,000 warning letters to holders suspected of having unpaid tax. The figures emerged following a freedom of information request reviewed by the BBC.
The total number of letters is nearly three times higher than the 27,714 warnings sent in 2024. HMRC believes a substantial portion of the unpaid tax stems from profits generated during the crypto bull run between 2022 and 2025.
Tax Obligations and Potential Penalties
The tax authority has reminded recipients that tax obligations can be triggered when digital assets are sold, given away, exchanged, or used to make purchases. Failing to pay what is owed can lead to financial penalties of up to 100% of the tax due, alongside additional interest charges, while offshore transfers may carry even greater consequences.
Enforcement is set to expand further as HMRC prepares to receive new powers in 2027. Under these measures, offshore firms will be required to share customer information with the UK tax authority. HMRC estimates this policy could raise £315 million, or approximately $430 million, by 2030.
Neela Chauhan, a partner at accounting firm UHY Hacker Young, noted that many traders are young and inexperienced in dealing with HMRC, often assuming the agency has limited visibility into their digital asset activity. Chauhan added that authorities suspect widespread tax evasion and that identifying unpaid liabilities among wealthy holders will become easier once the new powers are implemented.
Banking Access Challenges
Alongside tax enforcement, banking access remains a significant concern for the sector. Parliament’s Crypto and Digital Assets All-Party Parliamentary Group recently asked major UK bank executives to explain their policies regarding cryptocurrency businesses. The inquiry followed repeated complaints from firms struggling to open bank accounts and facing payment restrictions.
While acknowledging that banks must combat financial crime and protect customers, lawmakers asserted that businesses should be evaluated on individual risk rather than blanket sector policies. Research from the UK Cryptoasset Business Council indicates that banks block or delay roughly 40% of attempted transfers to digital asset exchanges.
