Thousands of UK crypto investors have never told HMRC about their gains or staking income, often because they didn't realise swaps were taxable or thought crypto was "untraceable". That's changing fast. If you've had an HMRC letter, or you know you've missed something, this guide explains how to put it right with the lowest cost and stress.
Quick answer
- From 1 January 2026, UK crypto platforms collect your details for HMRC under the Cryptoasset Reporting Framework (CARF). The first reports are due by 31 May 2027.
- Past years: use HMRC's "Tell HMRC about unpaid tax on cryptoassets" online service.
- How far back: 4 years (reasonable care), 6 years (careless), up to 20 years (deliberate).
- Pay within 30 days of submitting your disclosure.
- Coming forward before HMRC contacts you usually means lower penalties.
How HMRC finds out
- CARF (from 1 January 2026): UK crypto exchanges, brokers and custodial wallet providers collect each user's name, address, date of birth, tax residence, National Insurance number and transaction details, and report annually to HMRC. Overseas platforms in countries that have adopted CARF report to their own tax authorities, which share data with HMRC.
- Existing data: HMRC has already obtained customer information from UK exchanges in the past.
- "Nudge" letters: HMRC writes to people whose crypto activity doesn't appear to match their tax returns.
Got a letter? What to do
- Check it's genuine. Real HMRC letters come by post and quote your UTR or NI number. HMRC never asks for payment by crypto, gift cards or through links.
- Note the deadline. Many letters give around 30 days.
- Read what it asks. Some letters ask you to check your affairs. Some include a certificate of tax position to sign.
- Gather your data: exchange CSVs, wallet addresses, staking history (see below).
- Work out what's owed for each year. Often it's less than feared, once the £3,000 CGT exemption, losses, the £1,000 income allowance and correct pooling are applied.
- Respond properly: disclose if something's owed, or explain why nothing is.
Never sign a certificate saying your crypto is fully declared unless it's true. That can turn a careless error into a deliberate one.
The cryptoasset disclosure service
HMRC's dedicated online service lets you voluntarily disclose unpaid tax on exchange tokens (e.g. bitcoin), NFTs and utility tokens.
Before you start, you'll need:
- personal details and National Insurance number
- the number of transactions and exchanges used
- undeclared proceeds or income for each year
- acquisition costs and expenses
- gains or profits, with calculations
- tax and interest owed, with calculations
- whether you used a crypto tax calculator (and which one)
After you submit:
- HMRC sends a payment reference (usually within 15 working days)
- you must pay within 30 days of submitting the disclosure
- HMRC checks it and either accepts your offer or contacts you
Current and last year: income or gains from the current or previous tax year go on your Self Assessment return, not the disclosure service.
Using an agent: an accountant can submit on your behalf with temporary authorisation.
How far back do you have to go?
| Why the tax wasn't paid | Years to disclose |
|---|---|
| You took reasonable care but still got it wrong | 4 years |
| You didn't take enough care (careless) | Up to 6 years |
| Deliberate (you knew tax was due and didn't declare it) | Up to 20 years |
Be honest about which category applies. HMRC checks, and getting it wrong can mean higher penalties.
Interest and penalties
- Interest runs daily from when each year's tax was due until it's paid. If you leave interest out, HMRC will reject the disclosure.
- Penalties are a percentage of the unpaid tax, based on:
- behaviour: reasonable care, careless or deliberate; - whether the disclosure was unprompted (before HMRC contacted you) or prompted; - the quality of your disclosure (telling, helping, giving access).
- Unprompted, careless disclosures attract the lowest penalties, and the penalty can be nil where you took reasonable care.
- You propose the penalty percentage in the disclosure and explain why. HMRC may challenge it.
Worked example
Tom started trading crypto in 2021/22 and never declared anything. He was careless, not deliberate. Correctly calculated:
| Tax year | Net gains | Annual exempt amount | CGT due (higher-rate, 20% then) |
|---|---|---|---|
| 2021/22 | £18,000 | £12,300 | (£18,000 − £12,300) × 20% = £1,140 |
| 2022/23 | Loss £6,000 | £12,300 | £0. The loss is claimed and carried forward (claim deadline 5 April 2027). |
| 2023/24 | £14,000 − £6,000 loss b/f = £8,000 | £6,000 | (£8,000 − £6,000) × 20% = £400 |
| 2024/25 | £9,000 | £3,000 | On his 2024/25 return |
| 2025/26 | Staking £1,600 + gains £4,000 | £3,000 | On his 2025/26 return |
He uses the disclosure service for 2021/22–2023/24 (including the 2022/23 loss claim), with interest and a reduced unprompted penalty. He corrects 2024/25 by amending that return (if still in time) and reports 2025/26 on his return due 31 January 2027.
Illustrative. CGT rates for crypto were 10% / 20% before 30 October 2024 and 18% / 24% after. Assumes Tom was a higher-rate taxpayer throughout.
What not to do
- Don't ignore the letter or hope CARF won't catch you.
- Don't move crypto offshore or to private wallets "to hide it". Past data already exists, and it suggests deliberate behaviour.
- Don't guess the numbers. Reconcile properly. Over-estimating wastes money, and under-estimating risks a second penalty.
- Don't disclose only some years or only some exchanges.
Records to gather
- CSV exports from every exchange you've used (including closed accounts, so contact support for history)
- Wallet addresses and block-explorer histories
- Staking, mining and airdrop reward histories
- Bank statements showing deposits and withdrawals to exchanges
- Any previous tax returns
Part of our series: Crypto tax UK 2026/27: the complete guide
Related: Crypto capital gains tax · How to report crypto · Got an HMRC letter about overseas income?
Received a letter, or worried about past years? We handle crypto disclosures in confidence. Book a free consultation.
General information, not personal advice. Disclosure decisions have significant consequences, so get advice on your own facts.