More than 80,000 crypto traders told to cough up tax in HMRC crackdown

More than 81,000 letters were sent to cryptocurrency holders in the past year warning them that they may owe tax, new data has shown.

A freedom of information (FOI) request seen by the BBC has revealed the number of letters sent by HM Revenue and Customs (HMRC) had almost tripled since 2024.

For several years, the unregulated environment of crypto trading - which includes Bitcoin, Ethereum and thousands of smaller crypto coins - was one traders rarely bothered to report their gains from, but the demands on traders are effectively the same as those who buy and sell shares on the stock market outside of an ISA: capital gains should be declared, with tax paid, on amounts which surpass CGT thresholds.

"There is the expectation amongst tax authorities that cryptocurrency investment is rife with tax evasion," said Neela Chauhan, of UHY Hacker Young, who requested the FOI.

"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."

Cryptos are known as volatile assets. Over the past five years, Bitcoin is up 41 per cent, though is down 39 per cent in the past 12 months; Ethereum is down 31 and 48 per cent over the same timeframes respectively – but is up 19.5 per cent in the past week.