Big changes are coming for anyone in the UK who buys, sells, or holds crypto. From 1 January 2026, crypto platforms will be required to collect details about their users and share them with HMRC as part of a new international reporting system called the Cryptoasset Reporting Framework (CARF).
The aim is to bring crypto into line with the way banks and investment providers already report customer information. For HMRC, it means being able to match crypto transactions directly to tax records.
For investors and traders, it means greater transparency and far less room for mistakes or missed declarations.
The first reports won’t be due until May 2027, but the rules start applying from 2026. That makes now a good time to understand what’s changing, what information you’ll be asked for, and how it could affect your tax position.
What Is a Reporting Cryptoasset Service Provider?
When the new rules talk about a ‘cryptoasset service provider’, they’re not just referring to big-name exchanges.
Under the Cryptoasset Reporting Framework (CARF), the definition is broad and covers any business that helps you move, trade, or manage crypto.
That includes:
- Exchanges such as Coinbase, Binance or Kraken.
- NFT marketplaces like OpenSea or Blur.
- Wallet apps that let you send, receive or swap tokens (not just store them).
- Portfolio management services that trade or manage crypto on your behalf.
What’s not included are storage-only wallets where you hold your own private keys but don’t have the option to trade or transfer directly through the app. In those cases, you’re in control, and the provider isn’t considered a reporting service.
In short, if the platform allows you to transact in some way by either buying, selling, swapping, or moving crypto, it will almost certainly fall under the 2026 reporting rules.
What Counts as a Cryptoasset?
HMRC uses ‘cryptoasset’ as a catch-all term for a wide range of digital tokens, not just Bitcoin. If you’re buying, selling, or receiving any of the following, the reporting rules will apply:
- Exchange tokens. The most familiar type, used as a means of payment or investment. Bitcoin and Ethereum are well known examples.
- NFTs (non-fungible tokens). Unique tokens linked to digital art, collectibles, or gaming items.
- Utility tokens. Tokens that give you access to a product or service within a blockchain project, rather than being held only as an investment.
- Stablecoins. Designed to keep their value steady by being pegged to something else, such as the US dollar (e.g. USDT, USDC).
- Security tokens. Digital tokens that represent ownership in an asset or business, functioning in a similar way to shares or other investments.
If a digital asset can be used for payment or investment, HMRC is likely to treat it as a cryptoasset for tax purposes. That means even smaller or niche tokens fall within the same rules.
What Information Will You Need to Provide?
From 1 January 2026, anyone opening or holding an account with a reporting cryptoasset service provider will need to supply certain details.
For individuals, you’ll be asked for:
- Full name
- Date of birth
- Home address and country of residence
- A tax identification number (this is usually your National Insurance number or your Unique Taxpayer Reference)
For entities, you’ll be asked for:
- Legal business name and main address
- Company registration number (if UK based)
- Tax identification number (and issuing country, if non UK)
- In some cases, details of a controlling person such as a director, trustee or beneficial owner
Service providers will also need to record basic details of the transactions you carry out, so HMRC can connect your activity to your tax record.
If information is missing, incorrect, or not verified properly, penalties can apply, starting at £300.
How Reporting Works
The way your information is reported depends on both where you live and which platform you use. If you’re a UK resident using a UK based exchange or other crypto service provider, the details go straight to HMRC.
If you’re a UK resident trading through a provider overseas, things depend on whether that country has adopted the same reporting framework. Where it has, the local tax authority will collect your data and pass it on to HMRC.
The system also works in reverse. If you live outside the UK but use a UK platform, the provider must report your details to HMRC, which will then share them with the tax authority in your home country provided that country is part of the CARF agreement.
Collection starts from 1 January 2026, but nothing is actually sent to HMRC until the first reporting deadline on 31 May 2027, covering the full 2026 calendar year. After that, providers will report annually by 31 May for the previous year’s activity.
Why HMRC Is Collecting This Data
The short answer is tax transparency. The UK is adopting the OECD’s Cryptoasset Reporting Framework (CARF) so tax authorities can see crypto activity in a consistent way, much like they already do for bank and investment accounts under the Common Reporting Standard (CRS).
HMRC’s stated aim is to reduce evasion and avoidance, close the gap where people might have shifted funds into crypto to sit outside CRS, and keep a level playing field internationally.
CARF also enables automatic cross-border data sharing. UK platforms report UK users to HMRC, and HMRC exchanges data on non-UK users with other countries that have implemented CARF (and receives data on UK residents from those countries).
This gives HMRC the ability to match crypto transactions to UK tax records and nudge or enforce compliance where needed.
It’s worth noting this is separate from the FCA’s Travel Rule (an anti-money-laundering measure in place since 1 September 2023).
CARF is about tax reporting and international exchange of information; the Travel Rule is about verifying sender/recipient information on transfers to combat financial crime.
Tax on Crypto in the UK (Current Rules)
Most UK crypto tax falls into one of two buckets: Capital Gains Tax (CGT) when you dispose of tokens, and Income Tax when you receive tokens as a form of income.
Capital Gains Tax (CGT)
You’ll usually be within CGT when you sell, swap, spend, or gift your tokens (gifts to a spouse or civil partner are excluded). HMRC treats these as “disposals”, and you work out your gain per disposal.
For cost basis, HMRC uses pooling rules for fungible tokens (a single “section 104” pool per token type). NFTs are not pooled. The usual UK same-day and 30-day matching rules sit alongside pooling.
You also get an annual CGT allowance. For 2025/26, the Annual Exempt Amount is £3,000 (individuals).
Income Tax (and when NI can apply)
If you receive tokens as income, for example from mining, staking, lending/DeFi returns, or as employment pay, HMRC generally treats the value when you receive them as taxable income. If you later dispose of those tokens for more, CGT can also arise on the increase since receipt.
- Airdrops: These are not always income. They’re taxable as income only if received in return for (or in expectation of) a service or as part of a trade. Otherwise there’s no Income Tax on receipt; CGT can apply when you dispose of them.
- Employment income in tokens: Treated as earnings and subject to Income Tax and National Insurance (NI); employers must operate PAYE where tokens are readily convertible assets (which most exchange tokens are).
- Self-employed trading profits: If your crypto activity amounts to a trade, profits are taxed as trading income and Class 2/4 NI can apply (based on self-employed profits). If it’s not a trade, returns are usually miscellaneous income (which typically does not attract NI)
Preparing for 2026
The new rules don’t take effect until 1 January 2026, but getting organised now will make life far easier when reporting begins. A few practical steps are worth putting in place:
Keep accurate records.
HMRC already expects crypto investors to maintain detailed transaction logs featuring dates, amounts, GBP values at the time, counterparties, and wallet addresses where relevant. From 2026, when platforms also start reporting, having your own records will help you cross-check what’s been sent to HMRC.
Understand how the tax rules apply.
Make sure you know when a disposal is a Capital Gains Tax event and when income rules apply (for mining, staking, DeFi, or employment). Misunderstandings here are one of the most common reasons people underreport.
Use software or a specialist.
Crypto tax calculators can make it easier to track disposals and gains across multiple wallets and exchanges. For more complex activity, such as staking or DeFi lending, a tax adviser who understands HMRC’s crypto guidance can save you from costly errors.
Check your details with providers.
From 2026, platforms will be required to collect and verify personal information (such as NI number or UTR). Make sure your details are accurate and up to date, as incorrect or missing information could result in penalties of up to £300.
How Ryans Can Help
Dealing with crypto tax doesn’t have to feel overwhelming. At Ryans, we help investors, traders, and businesses stay compliant with HMRC while keeping tax bills as efficient as possible.
Our team follows the latest guidance on crypto so you don’t have to worry about missing a change or making an error.
Here’s how we can support you:
- Clear, tailored advice on how the UK tax rules apply to your specific situation.
- Capital Gains Tax calculations that show exactly what you owe and where you can save using allowances.
- Support with disclosures if you need to bring historic crypto income or gains up to date with HMRC.
- Long-term planning so you know how to manage tax efficiently as your crypto portfolio grows.
With the new CARF rules starting in 2026, now is the right time to put a plan in place. If you’re unsure how these changes affect you, or you just want peace of mind that your reporting is correct, get in touch with our crypto tax specialists today.
FAQ's
Do platforms like Coinbase or Binance report to HMRC?
Yes. UK-licensed crypto platforms such as Coinbase have already shared customer data with HMRC where thresholds (e.g., £5,000 in crypto holdings) are met.
Looking ahead, under CARF, all UK-based crypto platforms must collect user and transaction data beginning 1 January 2026 and report it annually to HMRC.
The same applies to platforms based in other countries that also implement CARF. They will report user data to their local authority, which in turn passes it to HMRC.
Contact UsIs crypto mining legal in the UK?
Crypto mining is legal. However, the rewarded tokens are typically taxable as income at the time they’re received (based on fair market value), unless the activity qualifies as a trade, then trading profit rules may apply.
If you later dispose of those tokens, you may also face a Capital Gains Tax on any gain since receipt.
Contact UsCan you avoid paying tax on crypto?
You can legally reduce your crypto tax bill, for example, by using your annual CGT allowance (£3,000 for 2025/26) or deducting allowable expenses against trading or miscellaneous income.
But tax evasion (deliberately hiding or underreporting crypto income/gains) is illegal and can lead to penalties far beyond the allowance figures.
HMRC is increasingly matching data from crypto platforms to self assessment returns, and has even sent ‘nudge’ letters reminding people to check their declarations.
Contact UsDo you pay tax on Bitcoin?
Yes. Bitcoin is fully treated as a cryptoasset for UK tax law. Disposals like selling, swapping, spending or gifting (unless to a spouse) can trigger Capital Gains Tax, while income derived from or paid in Bitcoin (such as mining or employment) can be Income Tax-able. It’s taxed just like any other crypto.
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