Guides · Last reviewed 31 October 2026 · 6-minute read

Got an HMRC letter about crypto? What it means and what to do

HMRC now receives data from crypto exchanges and writes to people it thinks may not have reported everything. A letter is not an investigation, but it does need a reply, and the figures it quotes are rarely the tax you actually owe.

What the letter is

These are often called nudge letters. HMRC sends them, without opening a formal enquiry, to people whose exchange data suggests sales, income or gains that may be missing from their tax returns. They ask you to check your returns and, if something was missed, to put it right.

Ignoring a letter is the one wrong answer. If HMRC doesn't get a satisfactory response, it may open an enquiry, and penalties are generally lower when people correct things before that happens.

Why the amount on a letter isn't your tax

Exchange data shows what you sold, not what your coins cost you or how they moved between your own wallets. A letter may point to £18,000 of sales when the real gain, after purchase costs, is a small fraction of that, or nothing at all. It can also miss gains on platforms HMRC hasn't seen. The only reliable answer comes from rebuilding your records for each year.

What to do

1. Note the date and the tax years. Letters usually ask for a reply by a set date. Write down which tax years they mention.
2. Don't sign anything yet. Some letters include a "certificate of tax position" to sign and return, confirming your tax affairs are correct. Professional bodies advise that it should not be completed in most cases without advice, so speak to an accountant before signing it.
3. Gather your records: exports from every exchange you have used, including closed ones, and the public addresses of your own wallets.
4. Rebuild each year the letter mentions, and any others affected: match transfers between your own wallets, trace what your coins cost, and apply the UK matching rules: the same-day and 30-day rules, then your section 104 pool. Earlier years matter because they set the cost of everything you sold later.
5. Check for losses. Losses can reduce your tax, but only once they have been reported to HMRC, so include them. See our guide to claiming losses.
6. Put it right through the correct route (below), yourself or through an accountant, and keep a copy of everything you send.

How to put it right

• A return you can still amend: you can correct a Self Assessment return online within 12 months of its filing deadline. For example, a 2024-25 return can usually be changed until 31 January 2027.
• Older years: HMRC has an online service to tell it about unpaid tax on cryptoassets. You work out the tax, interest and any penalty for each year, submit the disclosure, and pay within 30 days.
• How far back: HMRC's guidance links this to the reason the tax wasn't paid: 4 years if you took reasonable care, up to 6 years if you were careless, and up to 20 years if it was deliberate.
• Paid too much? If your records show you overpaid, you can claim it back for up to 4 years after the end of the tax year concerned.

Which route fits, which years to include and what penalty applies are judgement calls. They are worth an accountant's view, especially if several years are involved.

Prefer to hand it over?

You don't have to rebuild years of history yourself. We reconcile every year the letter asks about, and any others affected, and deliver a pack for each year with every calculation shown. You, your own accountant or one of our partner accountants then uses those figures to reply to HMRC. We don't contact HMRC ourselves.

Sources

• GOV.UK: Tell HMRC about unpaid tax on cryptoassets
• GOV.UK: If you need to change your Self Assessment return
• BDO: HMRC nudge letters, what you need to know
• HMRC Cryptoassets Manual, CRYPTO22100: what is a disposal

General information, not tax advice. Your own situation may differ; if you are unsure, speak to an accountant.