The UK has launched a significant expansion of crypto tax oversight, marking a new phase in global enforcement and bringing digital assets firmly into the mainstream tax system.
From Thursday, HM Revenue and Customs (HMRC) began collecting detailed transactional data related to cryptocurrencies, according to the Financial Times. The move reflects a growing determination by tax authorities to close long-standing reporting gaps around crypto profits.
Exchanges Ordered to Hand Over Full Records
Under the new rules, crypto exchanges serving UK-based users must submit comprehensive transaction histories to HMRC. Specifically, the data will include purchase prices, sale values, gains or losses, and each user’s tax residency status. The requirement applies to all major platforms serving customers linked to the UK.
The reporting requirements are based on the Cryptoasset Reporting Framework (CARF), developed by the OECD to standardise crypto tax reporting worldwide.
The UK is among the first 48 countries to implement the framework, with more than 75 jurisdictions signed up overall.
While the UK is moving early, other major financial centres are set to follow. For instance, Hong Kong, Switzerland, Singapore, and the UAE are scheduled to begin reporting in 2027. Meanwhile, the United States plans to initiate data collection in 2028, with international information sharing expected to start in 2029.
Automatic Cross-Border Sharing Ahead
HMRC is also preparing for automated exchanges of crypto data with overseas tax authorities. From 2027, crypto trading information will be shared with all EU member states and with jurisdictions such as the Cayman Islands, South Africa, Brazil, and the Channel Islands.
As a result, crypto transactions linked to UK taxpayers will become visible across participating jurisdictions.
Tax professionals say the changes represent a clear turning point. Andrew Park, a tax investigations specialist at Price Bailey, warned that the secrecy surrounding cryptocurrencies is effectively coming to an end. He added that investors in participating countries should expect their records to be shared directly with governments.
Therefore, Park urged traders to review their tax positions now, before compliance issues escalate into criminal investigations.
Broader Tax Exposure for UK Traders
The increased visibility significantly expands tax risk for many UK users. Anyone with more than £3,000 in crypto gains is liable for capital gains tax, while HMRC may apply income tax and national insurance if trading activity appears frequent or business-like.
As a result, how crypto activity is classified now matters as much as the size of the profits. Importantly, tax liabilities are not limited to cash sales. For instance, using cryptocurrency to purchase goods, swapping one token for another, or gifting assets can all count as taxable disposals. However, the only exception applies to transfers between spouses or civil partners.
Each transaction is assessed individually, widening the scope of potential liabilities.
Enforcement Already Intensifying
According to Dawn Register, a tax dispute specialist at BDO, HMRC has long suspected widespread underreporting of crypto gains. She noted that the international framework provides access to far richer datasets, which allows authorities to target suspected non-compliance more precisely.
Indeed, that shift is already reflected in enforcement activity. HMRC sent out 65,000 warning letters during the 2024–25 tax year to individuals thought to have unpaid crypto taxes, up from 27,700 in the previous year. These letters form part of a broader compliance strategy.
New Disclosure Tools and Reporting Rules
HMRC allows taxpayers to voluntarily disclose previously undeclared crypto gains, and experts recommend seeking professional advice before doing so.
The self-assessment tax return now includes a specific section for crypto profits and losses. Anyone with taxable crypto activity in the 2024–25 tax year may need to file a return by 31 January.
Seb Maley, chief executive of tax insurance firm Qdos, said the changes mark a fundamental shift, as HMRC will soon have much clearer visibility over who is making crypto gains and how much they owe.
Overall, the measures signal a move toward far greater transparency in cryptocurrency taxation.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.