An HMRC letter about cryptoassets is a one-to-many prompt: HMRC holds exchange data it cannot match to your tax returns, and it asks you to check the years named and, if tax is due, to disclose through its cryptoasset disclosure service. Gains above the £3,000 annual exempt amount (2026/27) are taxed at 18% or 24%. Since 1 January 2026 UK exchanges have had to collect your identity details under the Cryptoasset Reporting Framework, and they report your 2026 transactions to HMRC between 1 January and 31 May 2027. Correct as at 13 September 2026.
What is the 2026 HMRC crypto letter?
The letter is a campaign letter, not the opening of an enquiry. The same text goes to everyone whose exchange data HMRC could not reconcile to a return, and some recipients owe nothing.
It asks you to check your position for the tax years it names and to tell HMRC if tax is due. Some versions enclose a certificate of tax position for you to sign; that is a statement of fact, and it should wait until the figures exist. The generic mechanics are in our guide to HMRC nudge letters.
HMRC published figures on 27 August 2026 showing the scale of declared crypto gains: 17,600 individuals reported £1.38 billion of taxable gains for 2024/25 (HMRC press release).
What does HMRC actually know about my crypto?
More than the letter itself says. Since 1 January 2026 the Cryptoasset Reporting Framework (SI 2025/744) has obliged every UK cryptoasset service provider to collect your name, date of birth, address, country of residence and National Insurance number or UTR, and to record each transaction's value, token type and number of units.
The provider reports those details with a summary of your transactions to HMRC between 1 January 2027 and 31 May 2027 for the year to 31 December 2026 (GOV.UK, reporting cryptoasset user and transaction data). A user who gives inaccurate details, or none, can be charged a penalty of up to £300 (GOV.UK).
Overseas platforms in participating countries report to their own tax authority. The framework reports proceeds and volumes, never your cost or gain, so HMRC's figure is a starting point, not your bill.
Do I owe anything, and is it Capital Gains Tax or Income Tax?
For almost everyone it is Capital Gains Tax on each disposal. HMRC's manual says only in exceptional circumstances would an individual buy and sell tokens with the frequency and organisation that amounts to a financial trade (CRYPTO20250). Calling yourself a trader does not make it Income Tax.
A disposal (a sale, swap, spend or qualifying gift, defined in our guide to how cryptoassets are taxed in the UK) sets the gain as proceeds less the pooled cost for that token type, one pool per token across every exchange you used.
Gains within the annual exempt amount for the year mean no tax, but you still need the computation to prove it. The rate is 18% within the basic rate band and 24% above it for 2026/27 (GOV.UK rates and allowances); before 30 October 2024 the rates were 10% and 20%. Income Tax applies instead where tokens were received as income, and that goes in the same disclosure.
Which disclosure route applies: the cryptoasset service or the Worldwide Disclosure Facility?
Unpaid tax on cryptoassets goes through HMRC's dedicated cryptoasset disclosure service. It asks for your figures up front, and payment is due within 30 days of submitting.
The Worldwide Disclosure Facility is for a UK liability that relates to an offshore issue: income from a source outside the UK, assets held outside the UK, or activities carried on outside the UK. HMRC's own manual locates exchange tokens with the residence of their owner (CRYPTO22600), so a UK resident's coins on an overseas exchange are not automatically offshore. Where there is a genuine offshore element the WDF may be the right door, with 90 days from notification to complete.
Where any year could be read as deliberate, the campaign facilities are the wrong vehicle and a Code of Practice 9 conversation comes first. The route is chosen on the facts, and we say which before anything is notified.
How many years do I have to go back?
Four years if you took care to get your tax right, six if you did not take enough care, and up to 20 if the underpayment was deliberate. The behaviour you declare sets the years, feeds the penalty, and is the judgement HMRC tests hardest.
A reader who never registered for Self Assessment is in the failure to notify regime; one who filed but left the crypto off is in the inaccuracy regime, with a different penalty table. Interest runs daily from each year's due date, 31 January after the end of the tax year, at HMRC's late payment rate: 7.75% from 9 January 2026, base rate plus 4 percentage points (HMRC interest rates). Our guide to how far back HMRC can go covers what decides the time limit.
What are the penalties if I wait for HMRC?
A disclosure made after the letter arrives is prompted, and the minimum penalty rises. For a non-deliberate failure to notify more than 12 months old, the range is 10% to 30% of the tax if unprompted and 20% to 30% if prompted (CC/FS11, 19 March 2026). For a careless inaccuracy in a filed return it is 0% to 30% unprompted and 15% to 30% prompted. Deliberate conduct starts at 20% unprompted or 35% prompted and can reach 100% where it is also concealed (CC/FS7a, 21 July 2026).
Unprompted means telling HMRC before you had any reason to believe it was about to find the failure. A letter in hand removes that.
What to do in the first 14 days
The letter is answered by a reconstruction, not a reply, so the first fortnight goes on turning every export into a per-year gain figure before anything is signed or notified.
| Days | What to do | Why it matters |
|---|---|---|
| Days 1 to 2 | Read the letter twice; note the tax years it names and any date by which HMRC asks for a reply; do not sign a certificate of tax position yet | The letter names years, not amounts; the certificate is a statement of fact you cannot yet make |
| Days 1 to 3 | Log in to every exchange and wallet you have ever used, including closed accounts, and download the full transaction history as CSV; request it by email where the account is closed | GOV.UK requires records of every disposal in sterling with pooled cost; exchange summaries are not tax computations |
| Days 3 to 7 | List every disposal in each year the letter names (see the definition above); convert each to sterling at the date | Swaps and spends are disposals even though no cash arrived |
| Days 5 to 10 | Build one section 104 pool per token type across all exchanges; apply the matching rules for repurchases on the day and within 30 days; produce a gain or loss per tax year | This is the figure HMRC does not hold; the exchange reports proceeds and volumes, not your cost |
| Days 10 to 12 | Compare each year's gain with that year's annual exempt amount (£12,300 for 2022/23; £6,000 for 2023/24; £3,000 from 2024/25, GOV.UK) and with what you filed | Decides whether anything is owed and whether the reply is "checked, nothing due" or a disclosure |
| Days 12 to 14 | Decide behaviour (took care, careless, deliberate), the years, and the route (cryptoasset service, WDF, or COP9); take advice before notifying if the sums are material or any year could be read as deliberate | Behaviour sets the years and the penalty range and is the judgement HMRC tests |
The days are a working plan, not an HMRC deadline. Any date printed on the letter overrides them.
The exports, the sterling conversion and the disposal list are yours to do. Pooling under the matching rules, the behaviour statement, the route and any year that could be read as deliberate are adviser work.
Example
Example. A PAYE employee earning above the £50,270 higher rate threshold (2026/27) bought tokens from 2021, never registered for Self Assessment, and receives HMRC's letter in September 2026 naming 2022/23 to 2025/26. His reconstruction gives these gains after pooling (assumed figures): £15,000 for 2022/23, £9,000 for 2023/24, £11,000 for 2024/25 (disposals in February 2025, after the rate change) and £7,000 for 2025/26.
2022/23: £15,000 less the £12,300 annual exempt amount = £2,700 at 20% = £540. 2023/24: £9,000 less £6,000 = £3,000 at 20% = £600. 2024/25: £11,000 less £3,000 = £8,000 at 24% = £1,920. 2025/26: £7,000 less £3,000 = £4,000 at 24% = £960. Tax across the four years: £4,020, with interest added from the 31 January due date of each of the three years already due.
He never notified chargeability for 2022/23, 2023/24 or 2024/25, so CC/FS11 applies to those years. 2025/26 is not yet a failure: he can still register by 5 October 2026 and file and pay the £960 by 31 January 2027 with no penalty and no interest.
The letter makes any disclosure now prompted. The 2022/23 and 2023/24 tax (£1,140) fell due more than 12 months ago, so the non-deliberate prompted range is 20% to 30%: £228 to £342. For 2024/25 the £1,920 fell due on 31 January 2026, within the last 12 months, so the prompted range is 10% to 30%: £192 to £576.
Had he disclosed before the letter, the unprompted ranges would have been 10% to 30% (£114 to £342) and 0% to 30% (£0 to £576). The letter raised his penalty floor from £114 to £420.
What we do when you bring us the letter
We ask first for the letter itself and for the full transaction history from every exchange and wallet used since the first purchase, including closed accounts. The exports are the only source of your cost.
We reconstruct the disposals in sterling and work the section 104 pool for each token type across all exchanges together, then tell you what it shows, year by year: gains within the annual exempt amount, a loss position, income rather than gains, or tax owed. If nothing is owed we say so, and the response to HMRC is then a reply recording that the check was made.
Where tax is owed we choose the route on the facts, set out the years, and prepare the behaviour statement and the penalty position with you before anything is notified through the crypto tax disclosure service. If the history points to deliberate conduct we say that too, because the campaign route is then the wrong one.
Frequently Asked Questions
Yes, and increasingly in full. Since 1 January 2026 every UK cryptoasset service provider has had to collect your identity details and report your transactions to HMRC between 1 January and 31 May 2027. What HMRC receives is proceeds and volumes, not your cost or gain.
Whether a platform reports to HMRC directly or through another country's tax authority depends on where it is established; HMRC publishes the list of participating countries. Plan on the basis that a platform serving UK customers reports.
HMRC publishes no template and the letter does not need a formatted reply. The response is either a short statement that you have checked the years named and nothing is due, with the workings kept, or a disclosure through the cryptoasset service.
If your total gains for a year were within that year's annual exempt amount and you had no income from tokens, there is no tax to pay for that year. You still need the pooled computation to show it, and losses are worth reporting so they can be carried forward.
Talk to Zaman Khan before you reply to HMRC
The first conversation covers what the letter says, what your exports show and which route fits. Zaman Khan, Senior Manager, handles our tax investigation and HMRC disclosure work. Call 020 8554 2135, email info@visionconsulting.co.uk or use the contact page.
About Vision Consulting. Vision Consulting is a firm of chartered accountants and registered auditors, regulated by ICAEW, with offices in the City of London (the Gherkin, 30 St Mary Axe), the West End (33 Cavendish Square) and Gants Hill, Ilford. The firm provides year-end accounts, bookkeeping, payroll and tax compliance, including Making Tax Digital and VAT, for individuals, landlords, directors and businesses. Its specialist teams provide audit and assurance (company and charity audits and audit-exemption advice), probate and estate administration (the firm is licensed for non-contentious probate), inheritance-tax and estate planning, HMRC tax investigations and voluntary disclosures, property and landlord taxation, and corporation-tax and company advisory.
By the Vision Consulting team.
This is general information, not advice. Your position depends on your circumstances. Speak to us before acting on anything here.