From 1 January 2026, individuals and entities using cryptoasset service providers, along with certain UK based providers will be required to provide identifying information as part of a new compliance regime aimed at targeting tax avoidance. This will be enforced by the UK's tax, payments and customs authority, HM Revenue and Customs (HMRC).

The changes form part of the UK's domestic implementation of the Organisation for Economic Development (OECD) Crypto-Asset Reporting Framework (CARF), a global initiative aimed at improving tax transparency and tackling non-compliance in the digital asset space.

Users: UK-based and international crypto users alike can be affected, with HMRC gaining greater ability to link crypto transactions to taxpayer records and enforce tax obligations.

Providers: Likewise, reporting cryptoasset service providers (RCASPs), will have to amend their systems and procedures to comply with the changes to come. This includes UK based businesses that either transact cryptoassets on users' behalf or that provide a means for users to transact cryptoassets, inclusive of crypto exchanges, brokers and dealers.

A qualifying cryptoasset under CARF will be:

An organisation will be considered UK-based if it is:

What's Changing?

Under the new rules, anyone who buys, sells, transfers, or exchanges cryptoassets through a service provider must provide certain personal or business details. This includes:

For individual users:

For user entities (e.g., companies, partnerships, trusts, charities):

These requirements aim to ensure cryptoasset activity can be linked directly to users' tax records.

Cross-Border Implications

These obligations apply not only when using UK-based service providers, but also when engaging with providers based overseas.

Users must provide accurate identifying information to every cryptoasset service provider they use, regardless of where that provider is located.

Whether that information is ultimately shared with HMRC depends on the international cooperation framework in place:

Tax Considerations

HMRC's ability to link cryptoasset transactions to individuals and entities is expected to significantly enhance enforcement of existing tax obligations. Depending on how cryptoassets are used or received, users may be liable for:

Users with previously undeclared crypto-related gains or income may consider making a voluntary disclosure to HMRC through its digital disclosure service.

What will RCASPs Have to Do?

The measures to be brought in from 1 January 2026 will introduce new compliance requirements for UK based RCASPs.

Compliance will require the following:

RCASPs will have to verify that the information they collect is accurate by carrying out due diligence (further detail on this is due to be published).

HMRC guidance suggests that RCASPs may wish to collect the required information before 1 January 2026 in order to be ready when the new rules come into force.

Enforcement and Penalties

It is essential that the information provided is accurate and complete. Should a taxpayer declare income on their self-assessment tax return that differs from that reported by RCASPs, then HMRC may launch a tax investigation.

Users and RCASPs who fail to comply with these requirements, submit their report late, or who submit incorrect information (inaccurate, incomplete or unverified information), may face a fixed penalty of up to £300 per instance. This underscores the importance of maintaining up-to-date tax records and ensuring consistency across all platforms used.

What Should You Do Now?

Although the reporting obligations take effect from 2026, early preparation is strongly advised: