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If you buy, sell, or hold cryptoassets such as Bitcoin, Ethereum, or NFTs, you’ll soon find that HMRC will have far greater visibility of your activity. Starting from 1 January 2026, new international reporting rules will give HMRC access to detailed information about individuals and businesses using cryptoasset service providers. This marks one of the most significant shifts in how crypto transactions are monitored for tax purposes in the UK.
These changes mean that crypto activity will be more transparent than ever, and taxpayers will need to ensure that all gains and income from cryptoassets are declared correctly. Here’s what you need to know and how to prepare.
What Is Changing
From January 2026, cryptoasset service providers operating in the UK will be required to collect, store, and report specific information about their users and their crypto transactions. This includes exchanges, wallet providers, portfolio management services, and NFT marketplaces.
Service providers will have to report this information directly to HMRC. The new rules aim to provide tax authorities with a clearer picture of who is using crypto services, the scale of their transactions, and the value of their holdings. This data will be linked to users’ tax records to identify whether any income or gains should have been declared for tax purposes.
Individuals using these services will also have new obligations. They must provide accurate identifying details, such as their name, date of birth, and tax identification number. Failure to provide this information, or providing inaccurate details, can result in penalties of up to £300.
Global Information Sharing
The UK’s new rules are part of a broader international framework known as the Cryptoasset Reporting Framework (CARF). This initiative was developed to standardise how countries collect and exchange crypto transaction data to improve transparency and prevent tax evasion.
In practice, this means that if you are a UK resident but use a crypto platform based in another participating country, that country’s tax authority will share your information with HMRC. Likewise, the UK will share similar data with other jurisdictions for the benefit of their residents. This global approach ensures that moving crypto activity overseas will not keep it hidden from tax authorities.
Who Will Be Affected
The new reporting rules affect both service providers and individual users. UK-based businesses that facilitate crypto transactions on behalf of users will have to comply. This includes:
- Crypto exchanges where users buy, sell, or trade cryptoassets
- Online marketplaces where NFTs are bought and sold
- Wallet services and apps used to send or receive crypto
- Investment platforms managing crypto portfolios for clients
If you use any of these services to buy, sell, transfer, or exchange cryptoassets from 1 January 2026, you will be directly affected. You will be required to provide your identifying information so that your transactions can be linked to your tax profile.
For users residing in the UK who use non-UK crypto providers, the same rules apply regarding the international exchange of data. If the provider operates in a country that has signed up to the framework, your information will still be shared with HMRC.
What This Means for Crypto Investors
These new regulations mean that HMRC will soon have a much clearer picture of individual crypto activity. Previously, the decentralised and often anonymous nature of crypto made it difficult for authorities to accurately track gains and income. The new framework will change that.
If you have made profits from selling cryptoassets, exchanged one crypto for another, or earned rewards through mining or staking, HMRC will now have access to data that can identify those transactions. This increases the likelihood of tax discrepancies being detected and could lead to compliance checks or investigations.
The underlying tax rules themselves are not changing. Profits made from selling cryptoassets are generally subject to Capital Gains Tax, while income from activities such as mining, staking, or airdrops may be liable to Income Tax. What is changing is HMRC’s ability to verify the accuracy of what you report on your tax return.
Penalties and Enforcement
There will be penalties for both users and service providers who fail to comply with these regulations. Users who do not provide identifying information, or who submit incorrect details, may face a penalty of up to £300. Service providers that fail to report user or transaction data accurately could face financial penalties and enforcement action.
As HMRC begins receiving this data, they are expected to use it to identify undeclared income and capital gains from crypto transactions. Individuals who have not previously declared their crypto profits may receive letters from HMRC inviting them to correct their tax position or face potential investigation.
What You Should Do Now
If you hold or trade cryptoassets, there are several steps you should take to prepare for these changes:
- Review all your cryptocurrency activity and ensure your records are accurate and complete. This should include details of every purchase, sale, exchange, and transfer of property.
- Check that your crypto service providers have your correct personal details and tax identification information.
- Ensure that any gains or income from crypto are properly declared in your Self Assessment tax return.
- If you have not declared previous crypto activity, consider making a voluntary disclosure before HMRC contacts you.
- Seek professional advice if you are unsure about your tax obligations or how the new rules affect you.
Being proactive now will help you avoid penalties in the future. Once the reporting framework takes effect, HMRC will be able to identify undeclared crypto activity more easily.
How We Can Help
At Tax Accountant, we help individuals and businesses understand the tax implications of cryptoassets and stay compliant with HMRC’s evolving rules. Our team can review your cryptocurrency transactions, calculate any tax liabilities, and assist you in preparing for the upcoming reporting requirements.
We also assist clients who need to make voluntary disclosures to HMRC, ensuring that any historic crypto profits are declared correctly and that penalties are minimised. Whether you are a casual investor or actively trading crypto, our experts can provide tailored advice to keep you compliant and stress-free.