In a significant move to clamp down on tax evasion, HMRC is set to receive detailed information about UK households' cryptocurrency holdings directly from digital asset platforms. This initiative, announced as part of the Labour Party government's Autumn Budget, marks a new era of financial transparency for cryptoassets.
Key Dates for the Crypto Crackdown
The new reporting regime will be implemented in stages. Starting 1 January 2026, cryptocurrency platforms will be required to begin recording the gains made by their UK-based customers.
These platforms will then start sending this collected data to the tax authority from 2027. The information shared with HMRC will be comprehensive, including details on how much an individual paid for a cryptoasset, the amount they sold it for, and the total profit made from the transaction.
Aligning with Self-Assessment Returns
HMRC's primary objective is to cross-reference the data received from crypto platforms with individuals' self-assessment tax returns. This process is designed to ensure that returns are truthful and that all liable tax on crypto gains is being paid.
The push for greater oversight is supported by the Organisation for Economic Co-operation and Development (OECD), which developed the Crypto-Asset Reporting Framework (CARF). The OECD highlighted the risk that cryptoassets present, stating that their decentralised nature allows them to be "used for illicit activities or to evade tax obligations."
What This Means for UK Crypto Users
For the general public, this means that reporting crypto gains will become mandatory as part of annual tax returns. You are required to pay Capital Gains Tax if you make a profit when you 'dispose' of cryptocurrency.
Disposal includes not only selling tokens but also:
- Exchanging them for a different type of cryptoasset.
- Using them to pay for goods or services.
- Giving them to another person (unless it's a gift to a spouse, civil partner, or charity).
If your total gains from all disposals, including crypto, exceed the annual tax-free allowance for Capital Gains Tax in a tax year (6 April to 5 April), you must report this to HMRC and pay the due tax. Tax advisors have noted that this shake-up is particularly pertinent for SMEs and the self-employed who trade in cryptoassets.
