HMRC Issues Fresh Crypto Tax Nudge Letters to UK Investors

Date: November 25, 2025

HMRC has intensified its focus on individuals trading or investing in digital assets. Thousands of taxpayers have received “nudge letters” urging them to check whether they owe tax on past crypto activity.

Why HMRC Is Sending Crypto Tax Nudge Letters?

HMRC uses nudge letters to remind taxpayers of their responsibility to declare gains. These letters prompt individuals to review past filings and correct errors before formal compliance action.

What Crypto Investors Need to Know

Recipients are asked to confirm whether their returns fully reflect income and gains from crypto. HMRC expects individuals to act quickly if they identify omissions or misstatements.

Please do not ignore a nudge letter, failure to reply is likely to result in a formal enquiry.

Tax Responsibilities for Crypto Trading

Crypto gains may trigger capital gains tax, while frequent activity may fall under income tax rules. HMRC expects clear records of disposals, transfers, costs and transaction history.

HMRC’s Expanded Ability to Trace Crypto Activity

HMRC can match wallet transactions to UK bank accounts and obtain information directly from UK-based exchanges. This expanded visibility supports targeted compliance action.

International Crypto Reporting from 2026

From January 2026, an OECD initiative will give HMRC access to overseas crypto transaction data. This will enable cross-border tracking of trading, gains and holdings.

Penalties for Non-Compliance

Failing to report taxable gains can lead to interest, penalties and further investigation. Voluntary disclosure typically results in lower sanctions.

Surge in Nudge Letters Sent to Crypto Traders in 2025

HMRC issued far more warnings to crypto users in 2025. It is understood that circa 65,000 letters were sent, rising from 27,700 the previous year. The increase reflects rapid growth in market activity.

Sharp Growth in Crypto Gains Fuelling Increased UK Tax Liabilities

Rising prices since 2023 have driven up undeclared gains. An estimated seven million UK adults now hold £12.9bn in crypto, up from £7.8bn in 2022, with Bitcoin rising 315% in two years.

How HMRC Detects Undeclared Crypto Tax and sends Crypto Tax Nudge Letters

HMRC can link transactions to UK banking records and pull data from domestic exchanges. This capability enables wide-scale checks on unreported gains and income.

bear in mind that HMRC are likely to already have information of your crypto activity when sending a nudge letter. it is important to reply honestly.

Global Reporting to Support HMRC Enforcement

An OECD framework starting in 2026 will provide HMRC with international crypto data. This will close gaps created by offshore exchanges and wallets. this will result in automatic fines and more scope for investigations. Further information is available here “HMRC Crypto Tax Fines to become automatic: New Crypto Tax Reporting Rules”

What Investors Should Do Next (Even if They Haven’t Received a Crypto Tax Nudge Letter)

Anyone receiving a letter should review their tax position promptly. Accurate records of acquisitions, disposals and fees are essential for calculating any tax owed.

Even if you haven’t received a crypto tax nudge letter, it is always worth checking if you should be completing tax returns for crypto activity. Please contact us to discuss this with you. Failure to report can lead to significant fines and penalties. there is also the likelihood of a full tax investigation into all your affairs.