A letter from HMRC about cryptoassets is not a bill, not an assessment, and not the start of an enquiry. It is a nudge letter — one of a batch sent to people whose data suggests, but does not establish, that something was left off a return. HMRC sent 64,982 to crypto holders in 2024/25 and about 81,000 in 2025/26, on figures released under freedom of information rules rather than announced.
Nobody at HMRC has looked at your circumstances and concluded you owe money; a computer matched a name against exchange data and the letter followed. It says what to do if you owe tax, and invites you to write back if you do not.
First, work out whether you owe anything
Plenty of recipients owe nothing. Buying and holding is not a disposal, nor is moving coins between your own wallets, and gains under the £3,000 annual exempt amount produce no capital gains tax. What counts is selling, swapping one token for another, spending tokens, and giving them away to anyone but a spouse or civil partner. Swaps catch people, because no sterling ever moved.
If you owe nothing, reply and say so, with your reasoning. Do not sign anything you have not understood. Where an HMRC letter of this kind comes with a certificate to sign, professional bodies warn that these are not legally required and that signing one carelessly creates a fresh problem, because a false declaration is its own offence.
The letter is a question, not a conclusion. The worst response is to sign a declaration you have not checked; the second worst is to ignore it.
If you do owe, what it costs to have left it
Take somebody who was issued a notice to file, did not, and owes £4,000. Filing a year late attracts a £100 fixed penalty, £10 a day from three months capped at £900, and two further penalties of the greater of 5% or £300 at six and twelve months — £1,600 before any tax is paid. Late payment adds 5% at 30 days, six months and twelve months, three lots of £200, so £600. Interest at 7.75% adds £310.
That is £2,510 before HMRC considers behaviour. A failure to notify treated as non-deliberate and prompted carries 20% to 30% of the tax where HMRC learns of it more than twelve months after the tax fell due, so £800 to £1,200 more. The total lands between £3,310 and £3,710 on £4,000 — between four-fifths and nine-tenths of the liability again. Someone who never registered faces the failure-to-notify penalty without a notice to file, so the £1,600 stack does not automatically apply.
The bear case is worse. Most people held on exchanges outside the UK, and offshore penalty ranges are graded by how well the jurisdiction shares information; in the worst category deliberate behaviour can exceed 100% of the tax. The bull case is that these are ranges, and the quality of a disclosure moves you within them.
| Late filing penalties | £1,600 |
| Late payment penalties, 3 × 5% | £600 |
| Interest at 7.75% for one year | £310 |
| Failure to notify, prompted, non-deliberate | £800 to £1,200 |
| Total on top of the tax | £3,310 to £3,710 |
| Register for Self Assessment, 2025/26 | by 5 October 2026 |
| Online return and payment, 2025/26 | by 31 January 2027 |
| Assessment window, careless | 6 years |
| Assessment window, offshore matters | 12 years |
| Assessment window, deliberate or unnotified | 20 years |
The route HMRC wants you to use
For unpaid income tax or capital gains tax on cryptoassets there is a dedicated GOV.UK service, “Tell HMRC about unpaid tax on cryptoassets”. You sign in, calculate the tax, interest and penalties yourself, submit, and pay against the reference HMRC issues. Advisers note it does not reach corporation tax or inheritance tax, and that unlike the worldwide disclosure route it has no stage at which you register an intention to disclose and take your time over the figures.
Where the position spans several years, several exchanges, or offshore holdings, the older facilities can be the better door — exactly the judgement an adviser is for.
Filing normally rather than disclosing, the ordinary timetable applies: tell HMRC by 5 October following the tax year, then file and pay by the next 31 January. HMRC can go back four years as standard, six where behaviour was careless, twelve for offshore matters, and twenty where it was deliberate or where a person never notified chargeability at all — the category most non-filers are in.
Nudge letter mechanics, the crypto letter's contents and certificates of tax position from the Chartered Institute of Taxation. Volumes of 64,982 for 2024/25 and about 81,000 for 2025/26 are freedom-of-information figures obtained by UHY Hacker Young and reported in the trade press in August 2026, not HMRC-published statistics; the two are different years, not a contradiction. Self Assessment deadlines and penalties from GOV.UK; late payment interest of 7.75% effective 9 January 2026 from HMRC's published rates; inaccuracy penalties from CC/FS7a; onshore failure-to-notify ranges from Compliance Handbook CH73200 and CC/FS11, offshore ranges from CH114600; time limits from CH51300 and CH53600; disposals from CRYPTO22100. All retrieved 31 August 2026. The £4,000 example was computed for this article and assumes a notice to file was issued; interest is shown as a simple annual figure where HMRC calculates it daily. We could not confirm the crypto letter itself includes a certificate of tax position — that is documented for the offshore campaign — so the warning above is general. The disclosure service's exclusions and its lack of a notification stage are described by advisers, not stated on the GOV.UK page. Nothing here is tax advice; anything spanning multiple years or offshore exchanges needs an accountant.