For HMRC nudge letter recipients
Got an HMRC crypto letter?
You have a path forward.
You have 60 days to respond. For most UK investors that means recomputing gains under Section 104 pooling, separating income from disposals, and either confirming the return or amending it. ChainTax does the calculation end-to-end.
Free up to 200 transactions. Pay only when you download the report.
60 days
to respond
The letter is informal — but ignoring it triggers a formal enquiry. Replying inside the window keeps it routine.
~65,000
letters in 2024/25
More than double the prior year. CARF data feeds from UK exchanges went live January 2026 — volume will keep climbing.
Lower penalties
if you act first
Unprompted disclosure typically halves the penalty band vs HMRC finding it through enquiry. The earlier you correct, the cheaper it gets.
Before you reply
How far back can HMRC look?
The assessment window depends on which behaviour band HMRC assigns your case. Three tiers, set by statute:
4 years
Innocent error
Reasonable care taken, mistake made. The standard assessment window for honest errors.
6 years
Careless behaviour
You should have checked but didn't. Where most crypto nudge-letter cases land when activity wasn't reported.
20 years
Deliberate
Knowing concealment. Reserved for evidence of active hiding, not for honest oversight of complex DeFi history.
Most crypto nudge-letter cases land in the 4–6 year band. The 20-year ceiling exists but HMRC reserves it for cases where concealment is evidenced, not for users who simply hadn't realised swap-by-swap activity needed reporting. Voluntary disclosure inside the 60-day window is the cheapest way to keep a case in the lower band.
Which path is mine?
Three clear routes
Pick by transaction count and activity type. Most retail investors land in the first column.
Most common
Under 10,000 transactions
Coinbase, Binance, Kraken plus some DeFi. Run it yourself.
- • Connect wallets + import exchange CSVs
- • Engine sorts every event
- • SA108-ready PDF + CSV download
- • £49 (Light) or £99 (Active) per tax year
Above the cap
Over 10,000 transactions
High-volume DeFi, multi-wallet, NFT activity. We run the sync for you.
- • Email your wallet addresses
- • Fixed-price quote within 48 hours
- • Same engine, same audit trail
- • Typically £249–£449 per tax year
Specialist needed
Trade or business activity
Mining as a trade, company crypto, gambling-like activity.
- • Different tax treatment from CGT
- • Often needs SA100 income side too
- • A specialist accountant runs it end-to-end
- • We can refer you
Before you buy a self-serve plan
If you mined crypto as a business, ran a node commercially, the activity sits inside a UK company, or you suspect the undeclared amount is large enough to fall under HMRC's deliberate category, the right first step is an accountant — not a self-serve tool. Email hello@chaintax.co.uk and we'll point you at the right help.
Going formal
Disclosing through the Cryptoasset Disclosure Facility
HMRC launched the Cryptoasset Disclosure Facility (CDF) in November 2023 as a dedicated route for UK taxpayers who realise they owe crypto-related tax across one or more prior years. It's the formal disclosure path that sits alongside — not instead of — the simpler option of amending an existing Self Assessment return.
How the CDF works, step by step
- 1. Register intent via Government Gateway. Sign in to your HMRC online account and notify HMRC that you intend to disclose. Registration is free and locks in the start date for the 90-day window.
- 2. Gather records and calculate (90 days). From registration you have 90 days to assemble your full transaction history, recompute gains under HMRC rules (Section 104 pooling, same-day, 30-day Bed & Breakfast), separate income from disposals, and prepare the disclosure form. Most retail cases need the full window — reconstructing on-chain history alongside exchange CSVs takes longer than a normal SA filing.
- 3. Submit and pay. File the completed disclosure with your calculation, then pay the tax, interest, and the penalty band you have self-assessed as appropriate (reasonable care, careless, or deliberate). HMRC reviews and either accepts the figure or asks follow-up questions.
Worked example — four-year disclosure
Active Coinbase + Binance user, ETH and altcoin trades 2021–2024, never reported. Through the CDF: register intent in May, recompute four tax years (2020/21 through 2023/24) using Section 104 pooling across both exchanges, submit by August with a careless-behaviour self-classification, pay tax + interest + the unprompted-careless penalty. Compared with HMRC opening a formal enquiry first, the same case at the prompted-careless band carries a meaningfully higher penalty floor — coming forward unprompted is the lever that reduces it.
When CDF beats a plain SA amendment
For a single-year underreport with small amounts, amending the affected Self Assessment return is usually simpler. The CDF earns its complexity when the disclosure spans multiple years, when one or more of those years sits outside the normal amendment window, or when the amount is large enough that self-categorising the behaviour band materially affects the penalty range. CDF also creates an explicit unprompted-disclosure record, which matters for the penalty band.
Sense-check before you register
The CDF carries legal weight, and self-classifying the behaviour band has long-term penalty consequences. If your case spans many years, involves large amounts, or could plausibly fall into the deliberate band, speak to a specialist tax adviser before registering intent. Email hello@chaintax.co.uk and we'll point you at the right help. ChainTax produces the calculation; the disclosure decision belongs with you and an adviser.
If self-serve fits
What you get from ChainTax
HMRC matching rules done right
Same-day → 30-day bed-and-breakfast → Section 104 average-cost pooling, in the order HMRC requires. 2024/25 split-year CGT rate (10/20% before 30 Oct, 18/24% after) applied per disposal.
SA108 boxes 13.1–13.8 + Box 51
The dedicated crypto section introduced for 2024/25, mapped automatically. PDF report formatted for direct transcription onto the return.
Show Working — full audit trail
Every disposal shows the matching rule, the S104 pool snapshot before and after, and the price source with confidence rating. If HMRC asks for working, you have it.
Multi-year filing
The letter often references several years. Each tax year is a separate report; loss carry-forward is automatic across years. Bundle 2 years for a £19–£29 saving.
How it works
Four steps, mostly waiting on the sync
- 1
Sign up and add your wallets
Public addresses only — never private keys or exchange API keys. Add Coinbase, Binance, or Kraken via CSV import in the same flow.
- 2
The engine sorts every transaction
Disposals, income, transfers, liquidity — across Ethereum, Arbitrum, Optimism, Base, and Polygon. 32 protocol-specific detectors plus pattern matching and a generic-swap fallback.
- 3
Review the report — for free
Up to 200 transactions sort free. You see the full summary, the disposal breakdown, and Show Working before paying. No surprises.
- 4
Pay per tax year, download PDF + CSV
£49 Light / £99 Active. One year per purchase, no subscription. The PDF maps directly onto the SA108 boxes HMRC referenced in the letter.
What ChainTax doesn't do yet
No tax tool is perfect. Here's what ChainTax cannot yet handle automatically — and what you should check manually or discuss with your accountant.
- •Aave interest (aTokens) accrues via balance changes rather than individual transactions, so it doesn't appear in your transaction history. For now, add aToken interest manually as an income event — automatic detection via daily balance snapshots is on the roadmap.
- •Lido stETH rebase rewards happen at the protocol level and rarely appear as transactions in your wallet — so ChainTax now detects them automatically from your stETH balance growth and books each as income at its market value on the date received. It covers every stETH wallet on your account — add another and your next sync recalculates your rebase rewards across the complete set.
- •Deposits into Aave, Compound, Yearn, EigenLayer, and similar fixed-ratio lending or staking protocols are treated as transfers, not disposals — your cost basis carries to the receipt token (aToken, cToken, vault share). HMRC's strict reading (Cryptoassets Manual CRYPTO61620) could treat these as deemed disposals at deposit; HMRC confirmed in November 2025 that it is developing no-gain-no-loss rules matching the treatment ChainTax applies today, but they are not yet law — if you want strict-reading compliance, override the deposit event manually.
- •Some protocols return ETH via internal calls (Nexus Mutual, Rocket Pool, cbETH). We catch most of these automatically; when we can't, we flag the event for your review.
- •Five EVM chains supported: Ethereum, Arbitrum, Optimism, Base, and Polygon. Other chains (Solana, Avalanche, etc.) are not yet covered.
Full detail: How it works → Known limitations
FAQ
Common questions
I just got an HMRC nudge letter about crypto — what do I actually do?
You have 60 days from the date on the letter. The letter asks you to confirm whether your past self-assessment returns correctly reported your crypto disposals — every swap, sale, and DeFi event, not just GBP cash-outs. Gather your full transaction history, recompute the gains under HMRC rules (Section 104 pooling + same-day + 30-day B&B), and either confirm your returns are correct or amend them. Voluntary correction before HMRC opens a formal enquiry significantly reduces penalties.
Can I sort this out with ChainTax, or do I need an accountant?
For most UK retail investors — exchange use plus some DeFi, under 10,000 transactions across all wallets — ChainTax handles the calculation end-to-end. Connect your wallets and exchange CSVs, the engine sorts every event, and you get an SA108-ready PDF and CSV with full Show Working. If your situation involves mining as a trade, business or company crypto activity, large undisclosed amounts, or over 10,000 transactions, an accountant or our Concierge service is the better starting point.
How much does it cost?
Free up to 200 transactions. £49 for Light (up to 2,500 transactions per tax year) or £99 for Active (up to 10,000). One-time payment per tax year — if HMRC is asking about multiple years, you pay per year, with a 2-year bundle option. Concierge sync (we run it for you, over 10k transactions) is quote-first, typically £249–£449.
How far back can HMRC investigate?
Four years for innocent error, six years for careless error, and up to twenty years for deliberate non-disclosure. Most UK investors' entire crypto history falls inside the lookback window. The lookback is one reason voluntary disclosure matters — coming forward unprompted lowers the penalty band even on older years.
I don't think I owe much. Do I still need to respond?
Yes. Even if your gains are below the annual exempt amount (£3,000 for 2024/25 onwards), HMRC still expects a response confirming that. Ignoring a nudge letter doesn't close the file — it escalates it from informal to formal. The cheapest path is to run the numbers, confirm where you stand, and reply within the 60 days.
What if I used DeFi protocols HMRC has never named?
HMRC's Cryptoassets Manual (CRYPTO10000–CRYPTO45700) covers principles, not protocol-specific guidance for every contract. The engine applies the principles consistently — Uniswap V2/V3, Curve, Aave, Lido, Balancer, GMX, Seaport, Treasure, and more — 32 protocol-specific classifiers in total. For protocols outside the dedicated set, generic-swap and liquidity pattern matching catches the common shapes; anything novel surfaces as Needs Review for manual sorting.
Background reading: the full guide to HMRC's nudge-letter campaign.
Find out where you stand before the 60 days run out
Free up to 200 transactions. Pay only when you're ready to download the report. No subscription, no auto-renewal.
ChainTax is a tax calculation tool and does not provide tax, financial, or legal advice. Verify your figures with a qualified adviser before filing.