The United Kingdom’s tax authorities will significantly increase scrutiny on cryptocurrency transactions starting in 2026, mandating exchanges to report detailed user data to combat evasion.
HM Revenue & Customs (HMRC) will require all exchanges operating in the country to begin collecting comprehensive transaction histories from their British customers on January 1, 2026. This move aims to strengthen tax control over a rapidly growing market.
Platforms classified as “Reporting Cryptoasset Service Providers” must then submit this complete user information to HMRC throughout 2027. The tax authority plans to cross-reference this data with taxpayer declarations.
Taxpayers, traders, and investors in cryptocurrencies have until the end of 2026 to regularize their tax situations to avoid potential penalties for omissions or incomplete payments. HMRC has stated it will apply sanctions to platforms that fail to comply with the new reporting rules.
The regulation is part of a broader strategy to align the UK with the Crypto-Asset Reporting Framework (CARF), a transparency standard promoted by the Organisation for Economic Co-operation and Development (OECD). This global framework seeks to enhance visibility within the digital asset ecosystem.
CARF is already being implemented in major jurisdictions, including the European Union, Canada, Australia, Japan, and South Korea. This initiative places the UK in step with advanced economies that are tightening regulations to ensure cryptocurrency gains are properly declared and taxed.
Seb Maley, CEO of tax insurance provider Qdos, noted this represents “a significant shift in how cryptocurrency trading is monitored from a tax perspective.” The enhanced transparency could formalize the sector, potentially bolstering public and regulatory confidence.
The announcement follows a recent HMRC clarification that decentralized finance (DeFi) operations will be treated under a “no gain, no loss” principle. This means they are exempt from taxation until a user makes an actual economic realization, such as a sale or final withdrawal.
While HMRC has not detailed specific changes to cryptocurrency tax calculation methods, the agency anticipates a greater capacity to detect inconsistencies. This measure also reflects the UK’s ambition to develop a robust regulatory framework that fosters sector growth while preventing tax abuse.