Received a cryptoasset letter from HMRC? Here's what it could mean

Why is HMRC looking closely at crypto investments?  

Once thought of as virtually invisible to the tax authorities – and therefore not possible to tax – HMRC now has more visibility than ever over cryptoassets acquired and disposed of by UK taxpayers.  HMRC’s own stats reveal £1.38 billion of crypto gains in 2024/25 alone, so there is plenty of potential tax revenue for the tax authority to collect.  

Why has HMRC sent me a crypto letter? 

If you hold or have held investments in cryptoassets, such as bitcoin or non-fungible tokens (NFTs), and have received a letter from HMRC about it, don’t ignore it. There are several reasons HMRC may be getting in touch, which may require action on your part ranging from a review of your cryptoasset investments and transactions, to making a disclosure to HMRC and paying taxes. Here we explain what you need to know and what you may need to do. 

What is an HMRC crypto ‘nudge letter’? 

A nudge letter is a ‘one to many’ letter, email, text message or app notification sent by HMRC to a group of taxpayers it believes may need to take an action or pay additional tax.  

HMRC has ramped up its nudge letter campaigns relating to cryptoasset investments since 2023/24, with over 81,000 letters sent in the 2025/26 tax year. The most recent nudge letter, which is being sent between July 2026 and March 2027, identifies taxpayers who have held cryptoasset investments and reminds them they may need to pay capital gains tax (CGT) or income tax on their cryptoassets.  

What these letters are 

Nudge letters are sent to groups of taxpayers who may need to amend their self-assessment tax return and/or pay additional taxes. HMRC typically has a number of pieces of data about you which suggest you may have additional tax to pay and the letter will ask you to double check you have filed your tax return correctly and paid the right amount of tax.  

Why HMRC sends them 

In recent years HMRC has benefitted from many more data streams which can alert it to who holds cryptoassets in the UK. These include: 

• HMRC’s Connect system – uses AI to analyse different data sources to identify irregularities between them 
• HMRC’s right to request bulk data from crypto platforms (and other third parties) 
• CARF – since 1st January 2026, crypto exchanges and platforms have been obliged to report UK users’ transactions to HMRC 

It can then cross reference these data sources to identify those who may not be paying enough tax on their cryptoassets. HMRC’s figures suggest it expects to receive an additional £40 million in tax revenue in 2026/27 due to CARF, and an additional £110 million in 2027/28.  

Does receiving a crypto letter mean I’m under investigation? 

A nudge letter about your cryptoassets does not mean that HMRC has opened an investigation into your tax affairs. It simply means that HMRC’s systems have identified you are at higher risk of having underpaid your taxes or not filed your tax return correctly. 

Difference between nudge letters and formal enquiries 

A nudge letter means you should review your cryptoasset transactions and your self-assessment tax return for the year or years in question and take action if required. If you do not find any discrepancies, you do not need to do anything else. 

By contrast, you are obliged to reply to a formal enquiry or investigation by HMRC, which are typically started when HMRC officers have specific evidence that suggests you have incorrectly taxed certain activities. 

Why you should not ignore HMRC correspondence 

This doesn’t mean that you should ignore letters from HMRC. Nudge letters on cryptocurrency explain which activities could be taxable and ask you to review your finances and ensure you have paid your taxes correctly. For instance, the letter linked above points out the following cryptoasset activities could be taxable: 

• sale for standard currencies e.g. pound sterling or US dollars (also known as ‘fiat currency’) 
• exchange for another cryptoasset 
• use your crypto directly to buy something e.g. goods or services 
• gifting the crypto to someone else (unless they are your spouse) 
• trading  
• mining 
• receiving income in cryptoassets 

Ignoring the letter risks not identifying activity that should be reported and taxed. This means you could face penalties and interest from HMRC, which will only grow the longer you ignore them.

What should you do if you receive an HMRC crypto letter? 

There are some simple steps you should take straight away to either identify further action required or put your mind at rest that you have already done everything you need to:  

• Gather records – find all the relevant paperwork such as bank statements, crypto wallet statements and balances, crypto-exchange receipts and relevant emails and notifications. 
• Review your cryptoassets transactions – this includes activities such as selling cryptoassets and mining, staking or running a cryptoassets trading business. 
• Check past tax returns – have you reported your cryptoassets transactions when required? 
• Seek professional advice – if you think there are things you should have reported, speak to your accountant as soon as possible for advice on next steps.  

What taxes can apply to cryptocurrency? 

Different crypto-related activities can mean different tax charges.  

Capital Gains Tax 

HMRC does not classify crypto as currency, but instead as assets (hence the use of ‘cryptoassets’ rather than cryptocurrency throughout their guidance and manuals). This means that the default position is that you are taxed on cryptoassets gains as an investor, and they are subject to CGT like other assets such as property or shares.  

Income tax in certain circumstances 

You can face income tax on cryptoassets but this is less common than CGT charges. Examples include: 

• you are paid for employment in cryptoassets  
• your crypto activity meets the definition of a trading business 
• you received cryptoassets through mining, staking or airdrops 

See our article here for more detail.  

Can you correct previous errors? 

If you discover errors, you are obliged to correct them. The way to do this will depend on whether your self-assessment tax return is still open or not.  

Amending your tax return  

The deadline to amend your return is usually 12 months after the filing deadline. The 2024/25 tax return deadline was 31st January 2026 so for activity in the 2024/25 tax year, you would be able to amend your tax return until 31st January 2027. 

Voluntary disclosure 

If your tax return can no longer be amended, you need to make a voluntary disclosure instead. It is strongly recommended that you seek professional advice to do so. 

Importance of acting before HMRC contacts you further 

There are two big reasons to act before HMRC reviews your tax affairs in more detail: 

1. an unprompted disclosure typically receives a lower penalty  
2. interest accrues daily on unpaid tax, so you should try to minimise this  

How can TaxAssist Accountants help? 

Call us on 01249 848121 or use our online contact form for experienced, trustworthy advice on getting and staying compliant on your cryptoassets investments. We can also look after your tax affairs year-round for peace of mind and proactive, up to date advice.  
 

Last updated: 1st September 2026