HMRC sends 81,000 warning 'nudge letters' to Britons in tax clampdown - could you get one?

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Crypto investors are being reminded of their tax liability through 'nudge letters' from HMRC

HM Revenue and Customs (HMRC) has sent out 81,000 warning letters to British investors in the last year. Are you one of them?

The tax authority's pursuit of cryptocurrency investors suspected of evading tax has intensified sharply, according to UHY Hacker Young.

Over the past 12 months, HMRC dispatched tens of thousands of so-called "nudge" letters to crypto holders it believes may have underpaid.

This represents a 25 per cent jump compared with the 65,000 sent in the preceding year.

These warning letters offer recipients the chance to come forward and declare any outstanding tax liabilities before a formal investigation is launched.

Despite Bitcoin and Ethereum prices declining since October last year, HMRC believes significant capital gains tax remains unpaid from the prolonged bull market that ran between December 2022 and October 2025.

Neela Chauhan, a partner at UHY Hacker Young, said tax authorities widely regard cryptocurrency investment as a hotbed of non-compliance.

She explained: "There is the expectation amongst tax authorities that cryptocurrency investment is rife with tax evasion."

Many of those caught out tend to be younger investors with minimal prior dealings with the tax system.

Ms Chauhan added: "A lot of the traders are young, have had little previous exposure to HMRC and often work under the assumption that HMRC has limited visibility over their activities."

She stressed that the UK's tax rules around digital assets are far from straightforward, leaving many people unaware of when a taxable event has occurred.

"Crypto investors often forget that you may still have made a taxable gain even when you are swapping one cryptocurrency for another and might not be aware that the income you can earn by lending cryptocurrencies is taxable," she said.

"UK resident individuals are generally subject to UK tax on their worldwide income and gains, including profits arising from cryptocurrency transactions conducted through offshore platforms.

"As a result, taxpayers may inadvertently fail to report taxable gains or income simply because they do not appreciate that overseas exchanges do not remove their UK tax obligations."

HMRC already possesses the power to request information about UK taxpayers directly from cryptocurrency businesses operating within Britain, giving it a foundation on which far broader investigative capabilities are about to be built.

From May 31, 2027, the tax authority will begin automatically receiving comprehensive data on UK residents from crypto exchanges based across 52 jurisdictions, encompassing the Channel Islands, the Cayman Islands, Ireland and Liechtenstein.