UK crypto tax enforcement intensified sharply during the 2025/26 financial year, according to new figures from HM Revenue and Customs (HMRC). The tax authority sent more than 81,000 warning letters to crypto holders suspected of unpaid taxes — nearly triple the 27,714 letters issued in 2024.

HMRC attributes most of the outstanding crypto tax liabilities to gains realized during the bull market that ran between 2022 and 2025. The sharp rise in correspondence points to a broader push against unreported digital asset earnings.

Bull Run Gains Drive Growing Tax Bills

The HMRC data, obtained through a freedom of information request, shows the scale of the crackdown: warning letters jumped from 27,714 to more than 81,000 in a single year. Officials say the surge reflects gains many holders made as crypto prices climbed between 2022 and 2025.

Under current rules, selling, gifting, or swapping crypto can trigger a capital gains tax bill. Using digital assets to pay for goods or services carries the same obligation, and many traders remain unaware that these everyday actions count as taxable events. The stakes have grown in recent years: the annual capital gains tax-free allowance was cut from £12,300 to £3,000 between April 2023 and April 2024, so even relatively modest disposal gains can now exceed the threshold.

Neela Chauhan, a partner at accounting firm UHY Hacker Young, told the BBC that younger traders often misjudge HMRC's reach. Many, she said, "work under the assumption that HMRC has limited visibility over their activities." That assumption has become harder to sustain: HMRC has for several years demanded customer records from UK-facing crypto exchanges and has previously sent targeted "nudge letters" to users with suspected undeclared gains.

Penalties for unpaid crypto tax can reach 100% of the amount owed, plus interest. That figure rises further for transfers routed through offshore accounts. Chauhan noted that tax authorities suspect widespread underreporting across the trading community.

New Offshore Powers Loom Next

HMRC expects to gain new enforcement powers next year targeting offshore platforms. These rules would force offshore crypto firms to share customer data directly with the tax authority, and officials estimate the measures could raise 315 million pounds in revenue by 2030. The move ties the UK into a wider international effort: the data-sharing rules implement the OECD's Crypto-Asset Reporting Framework, a standard for the automatic exchange of crypto transaction data that dozens of jurisdictions have agreed to adopt, mirroring the cross-border reporting that already applies to traditional offshore bank accounts.

Chauhan told the BBC that tracking wealthy crypto holders will soon be "like shooting fish in a barrel." Once the new data-sharing powers take effect, tracking unpaid tax should become far simpler for officials — a remark that reflects growing confidence among tax professionals about closing the reporting gap.

Banks Face Growing Pressure Over Crypto Account Restrictions

Separately, tension between UK banks and crypto investors continues to build. A group of MPs from the crypto and digital assets all-party parliamentary group recently contacted major banks to raise concerns about ongoing account restrictions facing digital asset businesses.

The MPs described "repeated instances" of crypto firms struggling to open basic bank accounts, and warned that these restrictions could be one of the biggest barriers to growth for the sector.

The banking friction adds another layer of pressure on an already tightening regulatory landscape, which has included the Financial Conduct Authority policing cryptoasset promotions since October 2023. As HMRC ramps up its letters and prepares new offshore powers, crypto holders face rising scrutiny, and traders who assumed anonymity from the tax authority may find that assumption increasingly costly. The combined pressure of enforcement and banking restrictions signals a tougher environment ahead for UK crypto users.