UK Enforces New Crypto Tax Reporting Rules Under OECD CARF

UK introduces CARF rules requiring exchanges to report user crypto transactions and tax residency to HMRC by May 2027.

The UK, alongside more than 40 countries, began enforcing new crypto tax reporting rules on January 1 under the OECD’s Cryptoasset Reporting Framework (CARF). Major exchanges must now collect wallet activity, past transaction history, and tax information from UK users. They must submit all collected data directly to HM Revenue & Customs (HMRC).

Key Requirements and Reporting Deadlines

All UK-based crypto service providers, including exchanges and custodial wallet platforms, will need to meet compliance. Reporting Crypto-Asset Service Providers (RCASPs) will generate detailed user information from January 1, 2026.

Required data, namely, the full name, address, date of birth, tax residence, and National Insurance number of users. Providers are also required to document transaction type, number of assets, date, value, and purpose, such as sale, swap, staking, or mining.

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Reports for all of 2026 activity are due to HMRC by May 31, 2027; From 2027, HMRC will exchange this information with other CARF-participating countries. This step is to stop evasion of tax on a cross-border basis.

Currently, there are 40 countries, including the UK which have implemented CARF rules and 75 countries which have committed to join. The United States will adopt CARF in 2028 and will begin the sharing of data in 2029.

The UK is home to an estimated 6-7 million crypto users, which is around 10-12% of the adult population. Ownership has grown at a tremendous pace, spurred by Bitcoin, Ethereum, stablecoins, and decentralized finance platforms.

For many retail users, this is the first time that crypto activity will be monitored at the same level as bank accounts, creating increased transparency and regulations.

Impact on Users and Compliance

These rules do not introduce new taxes. Crypto gains are still taxed at the current Capital Gains Tax 10-20% or Income Tax Up to 24% dependent on the level of income and the category of the taxpayer.

However, there will be greater scrutiny as HMRC will have direct access to transaction data. Authorities will cross-check reports of exchanges against Self Assessment tax returns to find undeclared gains or discrepancies.

Users who do not give accurate information or make gains through underreporting could be fined up to GBP300, as well as back taxes and interest. The system mirrors previous international banking rules that helped to recover billions of pounds in unpaid taxes since 2014. Financial authorities stress that meeting compliance in due course will save taxpayers and minimize auditing risks.

The regulations also require that exchanges have robust infrastructure to keep records and make reports. RCASPs need to secure the storage of sensitive data and ease of submission to HMRC.

Additionally, cross-border data exchange will demand coordination with the tax authorities of foreign nations, forming a uniform standard of compliance globally. Experts say that these steps will professionalize the crypto markets and ensure that users are compliant with existing tax obligations.

Overall, CARF’s adoption puts the UK at the forefront of crypto tax transparency in the world. By enforcing reporting standards, authorities hope to strengthen compliance with the fiscal system, discourage tax evasion, and bring cryptocurrency into the formal financial system.

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