Starting 1 January, anyone buying or selling cryptocurrency in the UK must share their account details with HMRC. If they don’t, they could face penalties. This is part of a bigger effort to make sure all crypto profits, including capital gains, are properly taxed.
Cryptocurrency exchanges, which work like banks for digital coins, will now automatically send HMRC updated records of their users’ earnings. This makes it much harder for crypto investors to hide untaxed profits. HMRC hopes to collect at least £300 million over the next five years from unpaid taxes.
BPeople who bought when prices were low and sold when they were high could now owe taxes on their gains.
Dawn Register, a tax expert at BDO, says HMRC has long been worried about crypto investors not paying what they owe. “The new rules make it much harder to hide untaxed gains,” she explains.
The new system follows the Cryptoasset Reporting Framework (CARF), already being used in other countries. It will also help tax authorities share information internationally, making it easier to track crypto profits.
Anyone who made crypto gains in the 2024-25 financial year may need to file a tax return by 31 January. HMRC is also encouraging people to voluntarily report undeclared gains from previous years through a special disclosure facility.
Meanwhile, the Financial Conduct Authority (FCA) is running a public consultation until 12 February on broader crypto regulations. These include new rules for exchanges, responsible broker practices, and crypto lending and borrowing.
David Geale, FCA’s executive director for payments and digital finance, said, “Our goal is to protect consumers, support innovation, and build trust.” Feedback from the consultation will help finalize these rules.
These changes show the UK is serious about making crypto trading more transparent and ensuring everyone pays their fair share of tax.
