The UK government issued more than 81,000 warning letters to cryptocurrency holders suspected of owing unpaid taxes during the 2025/2026 financial year, according to information obtained via a freedom of information request by the BBC.
The latest figures show that the volume of letters sent by HM Revenue and Customs (HMRC) tripled compared to the 27,714 letters sent in 2024. Tax authorities believe that the majority of these unpaid taxes originate from gains achieved during the crypto bull run spanning from 2022 to 2025.
Tax Obligations and Penalties
The letters serve as a reminder to UK crypto users that capital gains tax may apply when they sell, give away, exchange, or make purchases with cryptocurrency. Individuals who fail to pay face potential penalties of up to 100% of the owed tax, alongside interest, with additional increases applicable to offshore transfers.
Neela Chauhan, a partner at accounting firm UHY Hacker Young, noted that many traders are young with minimal prior exposure to HMRC and frequently assume the agency has limited visibility over their activities. Chauhan added that tracking wealthy crypto users will become significantly easier once HMRC acquires new powers next year.
Upcoming Powers and Banking Friction
New powers scheduled to arrive next year will compel offshore crypto firms to share customer information with HMRC, an initiative the tax body estimates will generate £315 million by 2030.
Simultaneously, tensions persist between UK banks and crypto investors. Members of Parliament belonging to a crypto and digital assets all-party parliamentary group recently contacted UK banks to voice concerns over existing crypto restrictions and their impact on the broader market. The MPs reported repeated difficulties for crypto firms attempting to open bank accounts, warning that these limitations represent a major barrier to growth for the UK digital asset sector.
