Sweeping Tax Transparency Measures Will Apply to Every Trade and Transfer, Says HMRC
The United Kingdom will require all crypto firms operating in the country to collect and report detailed customer transaction data starting January 1, 2026, as part of a broader move to strengthen tax transparency and regulatory oversight, the UK Revenue and Customs (HMRC) announced on May 14.
Under the new rules, crypto companies must report every transaction, including the:
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Customer’s full name
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Residential address
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Tax identification number (TIN)
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Crypto asset used
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Amount transferred
Additionally, entities such as companies, trusts, and charities that transact on crypto platforms must also be reported.
“Failure to comply or submit accurate data may result in penalties of up to £300 ($398.4) per user,” HMRC stated.
Crypto Firms Encouraged to Start Preparing Now
Although the rule takes effect in 2026, authorities are urging crypto firms to begin collecting customer data immediately to ensure readiness and compliance.
HMRC says it will provide further implementation guidance in the coming months.
The new requirement is part of the UK’s adoption of the Organisation for Economic Co-operation and Development’s (OECD) Crypto-Asset Reporting Framework (CARF), a global initiative to increase cross-border crypto tax reporting transparency.
Part of Broader Regulatory Push Against Fraud
The announcement follows a wave of UK government efforts to crack down on crypto-related fraud and abuse. In April, UK Chancellor Rachel Reeves introduced draft legislation to bring crypto exchanges, custodians, and broker-dealers under the jurisdiction of UK regulators.
“Britain is open for business — but closed to fraud, abuse, and instability,” Reeves said.
The UK’s Financial Conduct Authority (FCA) found in November 2024 that 12% of UK adults held crypto assets, a sharp rise from 4% in 2021, underlining the growing importance of crypto in everyday finance.
UK vs. EU: Diverging Paths to Regulation
The UK’s approach differs notably from the European Union’s Markets in Crypto-Assets (MiCA) Regulation, which came into force last year.
According to the MiCA Crypto Alliance, key distinctions include:
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No requirement for foreign stablecoin issuers to register in the UK
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No cap on stablecoin transaction volumes, unlike the EU’s more restrictive approach aimed at managing systemic risks
These regulatory contrasts reflect the UK’s broader strategy of integrating crypto oversight into its existing financial frameworks, rather than creating a standalone regulatory regime.
Final Thoughts: UK Strikes Balance Between Innovation and Oversight
With its 2026 reporting mandate, the UK is taking a decisive step toward crypto tax transparency without outright stifling innovation. By aligning with OECD standards, the government aims to bolster investor protection, close tax loopholes, and position itself as a global leader in responsible crypto regulation.
While the new rules will introduce additional compliance burdens, they also signal that the UK sees a future where digital assets play a legitimate and regulated role in its financial system.
