UK Implements New Reporting Requirements for Crypto Service Providers
Beginning January 1, 2026, digital asset service providers in the UK will be required to submit customer data to His Majesty’s Revenue and Customs (HMRC). This move comes as a response to the adoption of the OECD’s Cryptoasset Reporting Framework (CARF), which sets global tax transparency standards for digital assets.
Under the new rules, all UK-based crypto service providers, including exchanges, brokers, and wallet operators, must collect detailed information on each user. However, reporting will only be necessary for users who are tax residents in the UK or in countries that have also adopted the CARF.
The required customer data includes full names, addresses, countries of residence, wallet addresses, and a breakdown of crypto transactions such as transfers, disposals, gross proceeds, and fair market values of the digital assets.
HMRC has set a deadline for the first report to be filed by May 31, 2027, covering transaction data for the 2026 calendar year. Subsequent annual reports must be submitted by May 31 for the previous year. If a firm has no reportable data for a particular year, they will not be required to file.
Non-compliance with these reporting requirements can lead to penalties of up to £300 per user. HMRC has emphasized that sanctions will be enforced for non-reporting, late submissions, and incomplete, inaccurate, or unverified data submissions.
UK’s Ongoing Efforts in Crypto Regulation
The implementation of the reporting framework is part of a larger initiative by the UK to formalize financial regulation for digital assets. In April, the UK Treasury introduced a draft amendment to the Financial Services and Markets Act 2000.
The proposed changes aim to regulate various aspects of the crypto sector, including stablecoins, staking services, and digital asset custody. Once enacted, these rules will subject crypto firms to oversight by the Financial Conduct Authority (FCA) and require them to obtain FCA authorization.
Compliance with traditional financial service standards will also be mandatory for crypto firms. The UK authorities argue that these regulatory measures are crucial for enhancing investor confidence, supporting the growth of the crypto industry, and safeguarding UK investors.