Is HMRC looking at your crypto activity?

Understanding the growing HMRC risk

HMRC’s latest published statistics show continued growth in both the number of taxpayers holding cryptoassets and associated tax receipts, making cryptoasset holders an increasingly prominent target for HMRC.

HMRC's statistics reveal, amongst other things, that in the 2024/25 tax year:

• 240 taxpayers reported more than £1 million in capital

  gains from cryptoassets, accounting for £717 million

  of cryptoasset gains between them, and

• 17,600 taxpayers made Capital Gains Tax liable disposals of cryptoassets (such as Bitcoin, Ethereum and Dogecoin), totalling £13.8 billion, with an average gain of £78,000 each.

Although cryptoassets have formed part of the UK economy for some time, HMRC’s approach to their taxation continues to evolve. The inherent complexity of cryptoassets, coupled with the wide range of tax issues they can create, means that understanding and meeting one’s obligations is not always straightforward. The result is an area increasingly ripe for HMRC scrutiny. Indeed, a recent BBC report revealed that HMRC had sent 81,000 letters to taxpayers in the previous year warning that they might owe Capital Gains Tax on their cryptoassets.

With the UK’s implementation of the Cryptoasset Reporting Framework (CARF) from January 2026, and HMRC set to receive data from cryptoasset service providers from 2027, the tax risks facing cryptoasset holders are increasing.

What should taxpayers do?

Taxpayers should ensure they understand the tax treatment of their cryptoasset activity, maintain detailed transaction records and ensure that all taxable income and gains arising from their cryptoasset activity have been correctly reported to HMRC. This is particularly important as HMRC gains access to more information from cryptoasset service providers and becomes better equipped to identify any discrepancies.

Taking prompt action can significantly reduce the risk of an HMRC intervention, limit potential interest and penalties, and help prevent matters from escalating. Where an error or omission is identified, early and carefully managed engagement with HMRC is often critical. In the most serious cases, particularly where HMRC suspects deliberate concealment, taxpayers may also face a criminal investigation.

Specialist professional advice should therefore be sought at the earliest opportunity. An experienced adviser can assess the position, quantify any potential exposure and manage appropriate disclosure or engagement with HMRC.