• The UK is set to begin enforcing tax evasion measures on residents who hold crypto under HMRC regulation.
• HMRC requires exchanges to collect transactional data to verify users’ tax returns.
• The new law is set to take effect on January 1, 2026.

UK crypto exchanges will be required to report detailed transaction data on resident users to  HM Revenue & Customs (HMRC) starting January 1, 2026, strengthening tax compliance among crypto investors in the region.

UK prepares fresh tax compliance rules for crypto exchanges

The UK is preparing to tighten oversight of digital asset activity, with new rules requiring crypto exchanges to provide HMRC with user data beginning in 2026. 

Platforms must start collecting information on user transactions starting from January 1, 2026, under the new Crypto-Asset Reporting Framework (CARF).

The requirement forms part of a broad update to how the government monitors crypto-related income. Exchanges operating in the region will need to store full transaction histories for every UK-based customer, a change that could effectively remove the anonymity gap many crypto traders rely on.

CARF was introduced to close gaps left by the existing Common Reporting Standard (CRS), which does not cover crypto transactions and risks creating blind spots for tax authorities.

The expanded requirement provides HMRC with a consistent dataset for compliance checks, enabling the agency to detect tax evasion more effectively and ensure taxpayers meet their obligations.

Under the new structure, crypto exchanges will be designated as Reporting Cryptoasset Service Providers (RCASPs). The requirement is not directed towards individual users and is expected to have only a minimal effect on the crypto industry. HMRC estimates that around 50 businesses may need to make minor adjustments to capture transaction data for UK-resident customers, including software updates and additional record-keeping.

Once received, the data will be used to determine tax liability without relying on personal filings. Platforms that fail to meet the disclosure requirements will face penalties.

With the countdown to 2026 already underway, British crypto investors now face a far more transparent tax environment and significantly less room for error when reporting their digital asset activity.

The reporting system adds to the recent increase in crypto regulations over the past year. Several regulatory agencies, including those in the US and the EU, are increasingly seeking ways to ensure proper guidelines for managing crypto-related activities in their respective regions.