Starting January 1, 2026, all digital asset service providers operating in the UK will be required to submit detailed customer information to His Majesty’s Revenue and Customs (HMRC). This significant regulatory change comes in response to the UK’s adoption of the OECD’s Cryptoasset Reporting Framework (CARF), which aims to enhance global tax transparency concerning digital assets.
As per the recent update from HMRC dated May 14, the new regulations will apply to all crypto service providers in the UK, including exchanges, brokers, and wallet operators. These entities must gather comprehensive details concerning their users, though reporting requirements will only pertain to those who are tax residents of the UK or other CARF-adopting nations.
The required customer information encompasses several vital data points: full name, residential address, country of residence, wallet addresses, and a detailed breakdown of all crypto transactions. This includes any transfers, disposals, gross proceeds, and the fair market values associated with the digital assets.
HMRC has set the deadline for the first report to be submitted by May 31, 2027, which will encapsulate transaction data for the 2026 calendar year. Following this initial submission, annual reports will need to be filed by May 31 for each preceding year. If a firm does not have any reportable data during a specific year, it will not be obligated to file a report.
Failure to adhere to these reporting requirements may lead to penalties of up to £300 for each user. HMRC has indicated that sanctions will be enforced for instances of non-reporting, late submissions, or if the information provided is found to be incomplete, inaccurate, or unverified.
UK’s Evolving Crypto Regulatory Landscape
This new reporting framework forms part of a larger initiative by the UK government to impose formal regulations on the digital asset sector. In April, the UK Treasury proposed amendments to the Financial Services and Markets Act 2000, aimed at regulating critical components of the crypto industry, including stablecoins, staking services, and digital asset custody.
Once these amendments are enacted, crypto firms will come under the oversight of the Financial Conduct Authority (FCA), necessitating FCA authorization compliance with regulations that are standard for traditional financial institutions. Authorities contend that these reforms are essential for enhancing investor confidence, fostering the growth of the crypto industry, and safeguarding UK investors.
