HMRC’s cryptoasset disclosure nets just £4m

See our latest cryptoassets article for AccountingWEB.co.uk, thanks to Richard Hattersley.

This is an update to our Crypto Tax Disclosures Oct 2025 article where we confirmed that HMRC had written out to over 100,000 people by 2024/25, to prompt voluntary crypto tax disclosures.

Who has crypto tax to pay?

Many cryptoasset investors have failed to report their crypto gains to date. That’s what HMRC believes, and anecdotally, this appears to be quite true. Most people appear not to have returned anything to HMRC.

Also, many have failed to recognise that even changing from one type of cryptoasset to another is a chargeable disposal for tax purposes. Cryptoassets continue to pose a significant tax risk for HMRC.

HMRC have been additionally frustrated by investors using international crypto trading platforms, which were not required to share any information with HMRC. However, this has changed drastically recently, which should produce a boon for them.

How to correct historic cryptoasset tax errors?

From experience, tax disclosure facilities offer the most favourable treatment and approach from HMRC, being (dare I say it) streamlined in comparison to enduring compliance checks into the same. This is especially the case where someone wants to make a wholly unprompted, voluntary disclosure. Also, in most cases, there should not be any penalties at all if handled well.

 

 

What has HMRC done to find cryptoasset investors?

HMRC had been approaching cryptoasset platforms directly for copies of their records on UK resident investors. They then wrote out to them using their one-to-many letters, as highlighted. These numbers grew and are given below.

HMRC has also signed up to the Crypto Asset Reporting Framework (CARF), which will see comprehensive information about investors and their cryptoassets being shared with HMRC automatically.

How many people has HMRC written to about their cryptoassets?

 

How many people have used the cryptoasset disclosure facility?

 

Since the number of disclosures made here under the cryptoasset disclosure service is very low, it is important to be aware that similar disclosures could also have been made to HMRC via other means, such as through the Digital Disclosure Service portal and Code of Practice 9 serious tax fraud investigations.

More information

If you or your client has been contacted by HMRC about cryptoasset gains, the process that follows should be kept on track and focused to bring about a swift conclusion. One must fully review the buying, exchanging and selling data, so that annual tax calculations are robustly prepared. That includes obtaining the raw data in an efficient way.

One should not wait for HMRC to write to them, ‘prompting’ a tax disclosure. HMRC will be mindful that they are armed with relevant cryptoassets information by then. Prompted disclosures usually cost more overall because of penalty implications. Investors could even find themselves defending against allegations of deliberate actions or dishonesty, which brings with it the possibility of being named and shamed publicly too.

This streamlined cryptoasset disclosure service is for crypto tax investors who have not reported sales and/or exchanges from one type to another that were reportable on personal self assessment tax returns.

Serious investigations – Crypto Tax Fraud

These civil investigations are time intensive and resource hungry, but are likely to be necessary to combat Crypto Tax Fraud. HMRC’s Fraud Investigation Service (FIS) investigators manage these, and have more time, give more attention, and are experienced. Remember, HMRC are seeking a recovery of taxes usually, late payment interest, and typically large penalties, for failing to submit correct tax returns or failing to notify HMRC that taxes were payable in the first place. Allegations of having acted deliberately or dishonestly can be common and HMRC are seeking to publicly name and shame people too.

Code of Practice 9

A Code of Practice 9, or COP9, is a civil investigation of suspected tax fraud, where taxpayers are explicitly accused of having acted dishonestly/with fraudulent intent. Taxpayers are given an opportunity to admit (at a high-level) tax fraud within 60 days in return for being able to make disclosures in much more detail later.

Taxpayers must disclose the background and reasons for their deliberate actions, compute the additional income, profits, gains, taxes, and late payment interest and penalties—all at their own cost. HMRC expects taxpayers to commission comprehensive disclosure reports—usually prepared by suitably experienced tax investigations specialists. In return, lengthy, in-depth, and intrusive investigations by HMRC are avoided, which can otherwise run on for many years. Crypto Tax Fraud should not be buried until caught; this facility encourages investors to to come clean and co-operate, bringing with it several benefits.

Code of Practice 8

A Code of Practice 8, COP8, is a civil investigation into large amounts of tax at risk, but not necessarily due to tax fraud—but it can include that too. It’s not unusual for these to be used against marketed avoidance schemes or arrangements and bespoke tax planning, where HMRC is likely to have made a discovery about historic tax risks. Crypto Tax Fraud is being tackled through COP8 too, which shows HMRC / FIS is not taking crypto tax omissions lightly.

The investigators are well prepared to argue they have identified new information and culpability— also triggering penalties. There is little possibility of dissuading them in favour of a COP9-style disclosure report and also typically some span years due to their in-depth nature.

They’re both carried out by HMRC’s FIS. They’re not routine HMRC compliance checks which are carried out into a single tax year or accounting period. FIS may approach third parties for information too which is common in Crypto Tax cases. Typically they consider and assess several prior years or periods, by claiming they have made “discoveries”. FIS investigators tend to identify and challenge “careless” and “deliberate” actions which support their reasons for looking at older periods, and so habitually go beyond the normal four years assessing-limit.

 

At the time of writing- ‘Former tax inspector Amit Puri, who will be speaking at the Finance, Accounting & Bookkeeping Show, reveals that HMRC’s new cryptoasset disclosure service has collected just £4m to date, despite extensive efforts to prompt investor compliance. Come to FAB on 11–12 March to hear more on HMRC’s tax investigations.’