- UK introduces new crypto tax rules, joining 75 countries in global efforts.
- The country cracks down on crypto tax evasion with new rules.
- Exchanges will be required to collect and submit user details to the HMRC.
The UK is joining the global effort to regulate the crypto industry by introducing new tax rules that will require CASPs to report user data and transaction information to HM Revenue & Customs (HMRC). In a bid to enhance taxation transparency and compliance in the digital asset market, the UK is launching new crypto regulation, effective January 1, 2026.
From today, crypto exchanges will be required to collect and report extensive transaction information from their users, including buying prices, sales information, gains, and taxation details. This information will be submitted directly to HMRC. This marks a significant shift towards transparency and accountability in the UK’s digital asset space.
New Crypto Tax Rules in the UK: Key Implications
The UK has now implemented new crypto regulations, especially focusing on taxation. These rules are aimed at increasing transparency and compliance in the cryptocurrency market.
According to the latest Financial Times report on UK crypto regulation, exchanges will be mandated to collect and submit detailed transaction reports from users to the HMRC. These details include purchase prices, sales info, profits, and taxation.
While crypto exchanges will start collecting user data immediately from today, the international exchange of this information will be implemented only in 2027. Starting next year, HMRC will automatically share crypto tax information with other participating countries, enhancing global cooperation and tax compliance. Andrew Park, tax investigations partner at Price Bailey, stated,
“This is the beginning of the end for crypto investors who thought they could invest and gain from crypto in secrecy from tax and other law enforcement agencies.”
Notably, the UK has been grappling with unclear crypto tax rules and unrevealed transaction gains. Many traders and investors have failed to report their earnings correctly. Despite existing tax rules, non-compliance has been a major concern, prompting calls for an automated reporting system and stricter rules.
Unveiling Global Adoption of Crypto Reporting Framework
Significantly, the UK’s crypto tax guidelines are part of the Crypto-Asset Reporting Framework (CARF), a global approach developed by the Organization for Economic Co-operation and Development (OECD) to improve reporting within the digital industry. The CARF framework aims to provide tax authorities with greater visibility and control over crypto taxation and prevent tax evasion.
The UK is among the first 48 countries to implement the CARF framework, demonstrating its commitment to global cooperation and crypto tax compliance. The country’s adoption of the crypto tax reporting rules is a significant step towards regulating the industry. Also, more countries are likely to follow the UK’s lead and implement similar crypto tax rules.
Already, 75 countries have signed to implement the CARF framework. While some countries are moving forward with the implementation, others will follow suit in the coming years. Notably, key financial hubs such as Singapore, Switzerland, Hong Kong, and the United Arab Emirates are expected to start reporting later this year.
The United States is also taking steps to increase transparency and tax compliance in the crypto space. The US government is considering proposals that would allow the IRS to monitor crypto holdings held overseas and tax crypto assets held by US citizens abroad.
