- From January 1, 2026, UK crypto exchanges must collect all transactions of UK users.
- The measure aligns with OECD’s Crypto-Asset Reporting Framework (CARF) for global tax compliance.
- Reporting impacts around 50 businesses, with negligible cost to the Exchequer.
The UK government has introduced new rules requiring crypto exchanges operating in the country to collect detailed transaction data for all UK users.
Beginning on January 1, 2026, these facilities, called Reporting Cryptoasset Service Providers (RCASPs), will be required to submit the data gathered to HMRC by 2027.
The idea is to provide the tax authority with a clear picture of the crypto activity of UK residents and lower tax evasion that is associated with digital assets.
This will take the UK in par with the OECD Crypto-Asset Reporting Framework (CARF) that already informs similar practice in the EU, Canada, Australia, Japan, and South Korea.
CARF enables the process of exchanging standardized and structured information on crypto-transactions across borders in a similar fashion to the Common Reporting Standard (CRS) on financial accounts.
Also Read: FCA Trials Crypto Disclosure Templates in Push for New UK Rulebook
Annual Data Collection and User Due Diligence
According to the new rules, the UK RCASPs will collect tax-related data and conduct due diligence on their users at least once a year. In the past, the activities of non-UK customers were the only ones that the UK-based RCASPs were mandated to report.
Under the update, HMRC will now get transaction information on both domestic and overseas RCASPs with CARF, which are also UK resident users.
These rules are the basis of secondary legislation, which will be adopted on June 25, 2025, and implemented on January 1, 2026. It is estimated that businesses are affected are around 50, including crypto exchanges and service providers.
Although the companies might have to modify their systems to gather more information about users, the administrative overhead is deemed to be insignificant, since most of the IT infrastructure has already been readied following the expectations of CARF compliance.
Demographics of Crypto Ownership in the U.K.
Individual crypto users do not have new tax obligations as a result of the reporting requirement. Rather, it makes sure that HMRC can access correct transaction information, and this will assist a taxpayer to be in compliance and minimise the chances of disagreements.
The report conducted by HMRC shows that younger adults between the ages of 16-44 years are the most likely to own crypto, with predominantly men (69%) and with a small overrepresentation of Asian or Asian British users (11%).
The economic impact of the measure on the Exchequer or the macroeconomic conditions, in general, is anticipated to be minimal.
It is still concentrated on making transparency, increasing tax compliance, and protecting the effectiveness of the system of international information exchange.
The law also gives the HM Treasury the ability to keep and update reporting requirements where needed in the future to have sustained control in the rapidly changing crypto market.
Also Read: Spain Reveals New Reform Targeting Crypto Rules and Tax Policies
