The UK’s tax authority is done being polite about crypto taxes. HMRC’s Cryptoasset Disclosure Facility, launched in November 2023, has now processed 280 settlements totaling £3.5 million, with the pace of voluntary confessions accelerating sharply this fiscal year.
Of those 280 settlements, 222 came during the 2025/26 fiscal year alone.
The nudge heard round the kingdom
HMRC isn’t just waiting for people to come forward out of the goodness of their hearts. The agency issued over 65,000 “nudge letters” during the 2024-25 tax year, nearly doubling the volume from the prior year.
Here’s the thing about HMRC’s estimates: they believe non-compliance among UK crypto holders sits somewhere between 55% and 95%. That’s a remarkably wide range, but even the low end means more than half of crypto investors in Britain aren’t properly reporting their gains.
CARF is coming
Starting in January 2026, the Crypto-Asset Reporting Framework, known as CARF, will require crypto service providers to report user data directly to HMRC.
CARF isn’t a solo British endeavor. The framework involves the UK and 48 other nations working together, meaning that moving your activity to an overseas exchange won’t necessarily shield you from reporting requirements.
For users who don’t comply with the new reporting obligations, HMRC has set penalties that may reach £300.
What this means for UK crypto investors
HMRC projects that its intensified enforcement strategy will generate at least £300 million in additional tax revenue over the next five years.
The £3.5 million collected so far through the disclosure facility is a fraction of that target, which means HMRC expects the real revenue to come from the mandatory reporting regime and the enforcement actions it enables. The current voluntary phase is essentially a grace period, an opportunity for investors to clean up their tax affairs before the data starts flowing automatically.