Ahead of the upcoming regulatory overhaul, UK authorities have introduced a new set of reporting rules to ensure crypto investors are not deliberately evading taxes, including fines for those who fail to comply with the new requirements.
Authorities To Address Tax Evasion
On Monday, the UK HM Revenue and Customs (HMRC) office announced that, starting January 2026, crypto holders will be required to provide personal data to their digital asset service providers to validate that they are not evading taxes.
The new rules, known as the Cryptoasset Reporting Framework, require crypto service providers to collect and report investors’ names, addresses, date of birth, tax residence, national insurance number or tax reference, and a summary of their crypto transactions.
Based on the collected information, the HMRC expects to identify those who haven’t been paying taxes on their crypto profits correctly and bring in money to fund vital public services, including frontline nurses, police, and teachers.
Investors who don’t comply with HMRC’s efforts to address non-compliance and tax evasion risk fines of up to £300, or around $409. Meanwhile, crypto service providers that fail to report the required information or submit inaccurate or incomplete reports could also be fined.
The initiative is estimated to raise up to £315 million, or $477 million, in tax revenue by April 2030, which could fund more than 10,000 newly qualified nurses for a year, the HMRC affirmed.
Additionally, they expect to align the UK with the international standard developed by the Organization for Economic Co-operation and Development (OECD), enabling tax authorities to share information across participating countries.
Member of Parliament and Exchequer Secretary to the Treasury James Murray affirmed that authorities are “going further and faster to crack down on tax dodgers as we close the tax gap and deliver on our Plan for Change.”
He considers that, “By ensuring everyone pays their fair share, the new crypto reporting rules will make sure tax dodgers have nowhere to hide, helping raise the revenue needed to fund our nurses, police and other vital public services.
UK’s Crypto Regulatory Overhaul
HMRC’s Director General for Customer Strategy and Tax Design, Jonathan Athow, noted that the upcoming rules aren’t a new taxation regime, as investors are already expected to pay the due tax if they make a profit when selling, swapping, or transferring crypto assets.
“These new reporting requirements will give us the information to help people get their tax affairs right,” he highlighted, urging crypto investors to have the required data to hand to help “avoid penalties in the future.”
The Tax authorities’ new requirements follow the UK’s financial watchdog efforts to establish a more comprehensive regulatory framework for digital assets starting next year.
In May, the Financial Conduct Authority (FCA) released a Discussion Paper on the features of the upcoming crypto regime as part of the financial authority’s crypto roadmap to expand from the current regime to a more comprehensive regulatory framework.
As reported by Bitcoinist, the FCA requested the public’s feedback on regulations related to trading platforms, intermediaries, staking, lending, borrowing, and decentralized finance.
Previously, the HM Treasury also published a draft and an explainer document detailing the intended policy outcomes of proposed provisions to establish a complete regime for digital assets.
The proposed rules are expected to bring exchanges, dealers, and agents into regulatory limits to crack down “on bad actors while supporting legitimate innovation,” and set clear transparency, consumer protection, and operational resilience standards, similar to traditional financial institutions.
