From January 2026, UK taxpayers who use crypto-assets will face new reporting obligations under regulations aligned with the OECD’s Crypto-Asset Reporting Framework (CARF). Announced by HMRC on 24 June 2025, these rules require crypto service providers to collect and report detailed personal and transactional data for users who are UK residents or residents of other CARF-compliant jurisdictions.
What’s Changing?
Although crypto-assets have always been subject to UK tax laws, including capital gains tax and potentially income tax, this new regulation shifts some of the reporting burden to crypto-asset platforms such as exchanges, wallet providers, and brokers. For the first time, these service providers must proactively report their users’ information directly to HMRC however tax payers will be responsible for providing certain information to the service providers to allow to report back to HMRC.
From 1 January 2026, the following data must be collected and submitted by crypto-asset service providers:
- 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)
Failure by the tax payer 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.
Increased Compliance
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.
This marks 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.
Reporting Crypto on Your Tax Return
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 CapitalGains Tax. Additionally, Income Tax and National Insurance may apply where crypto-assets are received as:
- Employment income
- Mining rewards
- Staking or lending proceeds
To accommodate this, the 2024/25 self-assessment tax return includes new disclosure sections specifically for crypto-asset income and gains. All UK taxpayers involved with crypto should ensure that these sections are completed accurately.
There is an HMRC cryptoasset disclosure service for voluntary disclosures where an individual may not have been previously compliant, however we recommend any crypto investors affected by CARF seek professional advice before taken the decision to use the CDS.
Economic Impact
The Government expects the CARF-aligned rules to yield an additional £315 million in tax revenue by April 2030. HMRC has already identified 50 UK-based crypto-asset service providers and estimates their annual compliance costs under the new rules at around £800,000.
The implementation cost to HMRC itself is forecasted at £69 million, largely covering IT infrastructure and support.
A tax information and impact note published with the regulations states that the rules are designed to deter individuals from failing to declare crypto-asset holdings and to encourage accurate and timely reporting.
Key Takeaways for Crypto Holders
- From 1 January 2026, crypto service providers and crypto exchanges will begin collecting data on users’ activities and reporting transaction details to HMRC for UK residents.
- Users will be required to provide service providers with the information requested.
- HMRC will use this data to enforce tax compliance and verify the accuracy of tax returns. Failure to disclose information, or service providers who submit inaccurate or incomplete records will be subject to fines of up to £300 per user.
- The 2024/25 self-assessment tax return requires full disclosure of crypto gains or income, under the capital gain pages.
UK taxpayers involved with crypto-assets should begin reviewing their records now to ensure full compliance. With greater transparency and increased enforcement on the horizon, proactive reporting is no longer optional, it is essential.
Next Steps
If you have any questions and/or would like advice on the above topic, please contact us at: hello@dixcartuk.com or your usual Dixcart contact.
