UHY Hacker Young Group, a UK accounting network, reports that in the past 12 months, HMRC has sent 81,000 warning letters to crypto investors, warning them they may have underpaid their taxes or not paid them at all.
Last year, UHY said 65,000 crypto investors, up from 27,700 the previous year, received a “nudge letter” cautioning possible scofflaws to pay capital gains tax on crypto trading.
In 2025, UHY stated that undeclared capital gains could be significant, as approximately seven million UK investors held an estimated £12.9 billion in crypto assets, up from £7.8 billion in 2022. This amount has now moved higher.
The number of letters this year has risen by about a quarter. UHY says many crypto investors are younger and have little exposure to tax requirements. Additionally, crypto tax treatment is described as complex. And it is not just capital gains, as yield products are also taxable. Taxable gains can occur in offshore trading accounts, something UK investors may ignore or simply be unaware of.
UHY predicts the number of crypto tax investigations will increase dramatically next year.
From May 31, 2027, HMRC will automatically start receiving data on UK residents from cryptocurrency exchanges located in 52 different jurisdictions. More jurisdictions will follow in 2028.
Neela Chauhan from UHY says that “once HMRC has this data, then tax investigations into cryptocurrency investors will be like shooting fish in a barrel.”
HMRC has created a disclosure service for crypto investors to streamline the payment process.
Ignoring the rules can result in penalties of up to 100% of the unpaid tax.
