The UK is expanding its cryptocurrency reporting regulations to include domestic transactions, aligning with international standards and intensifying scrutiny of the digital asset space.
Starting January 1, 2026, crypto exchanges and service providers operating in the UK will be required to collect and report detailed transaction data on all UK users to His Majesty's Revenue and Customs (HMRC). This move aims to provide the tax authority with a clearer view of crypto activity within the UK and reduce tax evasion associated with digital assets.
These new rules, announced by HMRC on June 24, 2025, are based on secondary legislation adopted on June 25, 2025, and implemented on January 1, 2026. They bring the UK in line with the OECD's Crypto-Asset Reporting Framework (CARF), which is already informing similar practices in the EU, Canada, Australia, Japan, and South Korea. CARF facilitates the exchange of standardized information on crypto transactions across borders, similar to the Common Reporting Standard (CRS) for financial accounts.
Under the updated regulations, Reporting Cryptoasset Service Providers (RCASPs) in the UK will gather tax-related data and conduct due diligence on their users at least annually. Previously, UK-based RCASPs were only mandated to report activities of non-UK customers. Now, HMRC will receive transaction information on both domestic and overseas RCASPs with CARF, pertaining to UK resident users.
The affected businesses, estimated to be around 50, including crypto exchanges and service providers, might need to modify their systems to gather more user information. However, the administrative overhead is considered insignificant since much of the IT infrastructure is already prepared following CARF compliance expectations.
The new rules shift some of the reporting burden to crypto-asset platforms such as exchanges, wallet providers, and brokers. These service providers must proactively report their users' information directly to HMRC. Taxpayers will be responsible for providing certain information to the service providers to allow them to report back to HMRC.
From January 1, 2026, crypto-asset service providers must collect and submit the following data:
- Full name
- Address
- Date of birth
- Tax residence(s)
- National Insurance number or Unique Taxpayer Reference
- Summary of crypto transactions (e.g., sales, transfers, exchanges)
- Value
- Type of crypto asset
- Type of transaction
- Number of units
HMRC will use this data to cross-check taxpayers' self-assessment returns, ensuring that income and gains from crypto-assets are reported correctly. In cases where no tax return is submitted, HMRC may use the data to estimate and assess the tax due. Failure to provide accurate and complete information to the service provider or failing to report altogether could result in penalties of up to £300 per user, applicable to both users and service providers.
While the reporting framework is new, the tax treatment of crypto-assets is not. Profits or gains from the sale, swap, or transfer of crypto-assets have long been subject to Capital Gains Tax. Additionally, Income Tax and National Insurance may apply where crypto-assets are received as employment income, mining rewards, or staking/lending proceeds.
These changes mark a significant shift in enforcement strategy. Historically, crypto tax compliance relied heavily on voluntary disclosure. Now, with transactional information coming directly from crypto platforms, HMRC is better equipped to identify underreporting or non-compliance.
