UK verification of tax returns on encrypted assets is being strengthened. The latest data show that the British Revenue and Customs Service (HMRC) sent 81,172 alerts, mails and text messages to encrypted investors in fiscal year 2025/26, up from 64,982 in the previous fiscal year.

These data were obtained from the accounting firm UHY Hacker Young through the Freedom of Information Act and subsequently reported by BBC. In the view of the PMRC, part of the undeclared tax may be associated with the gains from the increase in the price of encrypted assets between late 2022 and 2025.

The number of warnings increased from the previous year

The PMRC usually sends a reminder when the information available indicates that the taxpayer may have omitted to report income or capital gains, requiring the person concerned to check the record and correct the error.

Under the rules in force in the United Kingdom, an individual may incur a capital gains tax obligation if he or she sells an encrypted asset into French currency, exchanges one currency for another, buys a commodity using an encrypted asset, or gives another person a coin. Tax treatment is usually different for gifts to spouses, civil partners or eligible charities.

The tax burden is for the proceeds, not the total amount of the transaction. The taxpayer is required to calculate the proceeds of disposal in Pounds sterling, less the eligible cost of acquisition. The PMRC also requires investors to keep records for all kinds of coin pools.

Since 2026, the Platform will need to collect client data

The United Kingdom implemented the Encrypted Asset Delivery Framework on 1 January 2026. From that date onwards, the covered encryption service provider is required to collect customer identification information and transaction data.

The information to be collected by the platform may include names, addresses, identity of tax residents and tax numbers. The first data reports covering 2026 activities are required for the Platform between 1 January and 31 May 2027, in accordance with the published HMRC rules.

  • The first reports cover 2026 transactions
  • Submission window 1 January to 31 May 2027
  • Up to Pound300 per person with missing client information

The framework also supports the exchange of information between participating jurisdictions, which means that HMRC may also in the future obtain records of overseas platforms that provide some of its services to British residents. It is expected that by April 2030, this package will generate up to Pound315 million in taxes.

If the customer does not provide the required information, he is liable to a fine of up to Pound300. The Platform may also be penalized for submitting incomplete or inaccurate reports.

Investors can voluntarily report historical taxes

HMRC allows taxpayers to voluntarily report, through Criptoasset Disclosure Service, the previously unpaid amounts of the tax relating to encryption, which may cover the income tax on capital gains and income tax on previous fiscal years.

In addition to the sale, income tax and national insurance obligations may also be triggered by encrypted assets acquired through hire remuneration, mining, pledge, borrowing and some DeFi arrangements. Additional capital gains may result from the subsequent disposal of these assets.

The PMRC states that a fine of up to 100 per cent of the taxable amount may be imposed in the United Kingdom; the penalty may be higher in cases of offshoring. The final amount usually depends on the taxpayer ' s behaviour, the time of disclosure and the degree of cooperation.

The reporting system does not create a new encryption tax, but rather provides more data for the PMRC to verify that taxpayers comply with existing rules.