HMRC sent 81,000 warning letters to crypto investors in the 2025/26 financial year, suspecting them of underpaying tax on their cryptoassets. This figure marks an increase from 65,000 letters in 2024/25 and 27,700 in 2023/24, according to a Freedom of Information request by UHY Hacker Young.
The Financial Conduct Authority (FCA) reported that 8% of UK adults owned cryptoassets in 2025, a rise from 4% in 2021. Despite this growing ownership, there are concerns that some investors do not fully grasp the tax implications of receiving, holding, and selling these assets.
Neela Chauhan, a partner at UHY Hacker Young, noted that many crypto traders are young and may assume HMRC has limited visibility over their activities. The tax treatment of cryptocurrency in the UK is complex, and individuals may not be aware that swapping one cryptocurrency for another can result in a taxable gain, or that income from lending cryptocurrencies is taxable.
Individuals may owe Capital Gains Tax (CGT) when disposing of cryptoassets for a profit, similar to stocks or shares. Disposing includes selling, exchanging for another cryptoasset, using it to pay for goods or services, or gifting it to someone other than a spouse, civil partner, or charity. Everyone has a £3,000 CGT allowance each financial year.
Income tax may also be due on cryptoassets received through activities such as mining, staking, or certain airdrops. Cryptoassets received as employment income are also subject to income tax. A £1,000 annual allowance applies to trading or miscellaneous income, which can include income from mining, staking, and airdropping.