From 1 January 2026, new reporting rules will give HMRC a much better picture of those who use cryptoassets service providers, and the transactions they are involved in.

Service providers will be required to collect certain specific data and report information on those who use their services. Those using them will have to supply identifying details, as well. There will be a penalty of up to £300 for users who fail to give details, or provide inaccurate information.

International information sharing

It’s all part of a move to standardise global reporting on cryptoassets, known as the Cryptoasset Reporting Framework (CARF), and the aim is to make cryptoasset transactions more visible for tax purposes, by the sharing of information between different countries, for example.

How it will work

The rules impact any UK-based businesses which either transact cryptoassets on behalf of users, or provide a means for users to do so. Examples of cryptoassets services include online marketplaces where NFTs (non-fungible tokens) are bought and sold; wallet apps used to exchange bitcoin; and services where someone pays to have their cryptoassets portfolio managed.

If you use a cryptoasset service provider to buy, sell, transfer or exchange cryptoassets from this date, you will also be impacted by the rules. You will have to provide certain identifying details which will be used to link your crypto transactions with your tax records, and help HMRC to establish any tax liability. If you live in the UK, but use a non-UK cryptoassets service provider, that country’s tax authority will share your information with HMRC if it is also signed up to this agreement.

The taxation of cryptoassets can be a complex area, but we are here to help. Please do contact us for further advice.