The tax authority has intensified its scrutiny of the cryptocurrency market, sending over 81,000 warning letters, emails and SMS messages to owners of digital assets in the past financial year. The number of such communications has nearly tripled compared to the 2023–2024 period, when 27,714 warnings were sent, indicating a significantly heightened effort by the authority in combating tax irregularities.
The authority suspects that a large number of cases of unpaid capital gains are arising from the significant rise in the value of cryptocurrencies between December 2022 and October 2025. During that period, the price of Bitcoin rose from around £14,000 to £90,000, creating potentially vast tax liabilities that many investors had not reported. Although the values of Bitcoin and Ethereum have fallen in the past year, the authority stresses that the obligation to report gains remains even if one cryptocurrency is exchanged for another.
Cryptocurrency owners risk penalties or prosecution if they do not declare gains made from sales. Experts warn that many traders, who are often young people with little experience dealing with tax authorities, mistakenly assume that the authority has limited visibility over their transactions. A partner at the accounting firm UHY Hacker Young states that investments in cryptocurrency are subject to significant tax implications.
In addition to current measures, the authority will be given new powers next year to facilitate targeting wealthy investors in cryptocurrency. Accountants advise investors to check urgently whether they are liable to pay outstanding tax, given that the value of assets in that period has risen significantly, creating liabilities that were not visible in earlier periods of a more stable market.
