Digital asset service providers in the UK must submit customer data to His Majesty’s Revenue and Customs (HMRC) beginning Jan. 1, 2026.
Under the rules, all UK-based crypto service providers, including exchanges, brokers, and wallet operators, must collect details on every user. However, reporting will be limited to users who are tax residents in the UK or other countries that have adopted CARF.
These details include a customer’s full name, address, country of residence, wallet addresses, and a breakdown of crypto transactions, including transfers, disposals, gross proceeds, and fair market values of the digital assets.
HMRC requires the first report to be filed by May 31, 2027. This will cover transaction data for the 2026 calendar year.
After that, the service providers must submit annual reports by May 31 for the previous year. If a firm has no reportable data in a given year, it will not be required to file.
Meanwhile, failure to comply with these requirements could result in penalties of up to £300 per user. HMRC stated that sanctions apply for non-reporting, late submissions, or if the submitted data is incomplete, inaccurate, or unverified.
Once enacted, the rules will place crypto firms under the Financial Conduct Authority (FCA) oversight. It would also require the firms to secure FCA authorization and comply with standards that govern traditional financial services.
The authorities argued that these changes are necessary to boost investor confidence, support the crypto industry’s growth, and protect UK investors.
