The UK government has introduced new regulations that significantly change how cryptocurrency activity is reported for tax purposes. From 1 January 2026, crypto investors and service providers will be required to share detailed account and transaction information with HM Revenue & Customs (HMRC) as part of a wider push to improve tax transparency.
These rules are being implemented under the Crypto-Asset Reporting Framework (CARF), an international system designed to ensure that profits made from digital assets are properly declared and taxed. Under this framework, cryptocurrency exchanges and platforms operating in the UK must collect customer identity details, transaction histories, and information on gains or losses, and report this data directly to HMRC.
For individual investors, this means crypto profits will now be monitored in a similar way to traditional investments such as shares. Any gains made from buying and selling cryptocurrencies may be subject to capital gains tax, and failure to report accurate information could result in penalties or enforcement action.
HMRC believes the new system will reduce tax evasion and close gaps where crypto income has previously gone undeclared. Authorities have also encouraged investors who may have missed reporting crypto gains in the past to correct their records before full data sharing begins.
The move reflects a broader shift by the United Kingdom to bring digital assets under the same regulatory and tax oversight as conventional financial markets. As more countries adopt similar frameworks, crypto investors can expect increased scrutiny and fewer opportunities to operate outside the tax system.
