05-20-2025 
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The United Kingdom tax authority will require digital asset companies to collect and report data from every customer trade and transfer starting January 1, 2026, as part of a broader effort to improve digital asset tax reporting and combat evasion.
According to a May 14 announcement by HM Revenue & Customs (HMRC), the U.K. government’s new data collection plan follows the introduction of the Organisation for Economic Co-operation and Development’s (OECD) Cryptoasset Reporting Framework (CARF)—a global tax transparency initiative designed to set a standard for tax reporting and improve the exchange of information between countries on crypto-asset transactions, to combat tax evasion.
Under the incoming changes, digital asset companies must collect detailed information on all U.K. users—individuals and businesses—including name, date of birth, home address, country of residence, legal business name, and main business address.
When it comes to transactions, companies will also need to collect information on the value, type of digital asset, type of transaction, and number of units, for every trade and transfer.
The new requirements kick in on January 1, 2026, but the U.K. tax authority suggested that digital asset companies “may want to start collecting information earlier, so that you are ready when the new rules come into force.”
Failure to comply with the new rules, including inaccurate, incomplete or unverified reports, could result in penalties of up to £300 ($401) per user, warned HMRC.
Therefore, firms will also need to carry out due diligence to verify that the information they collect is accurate, said HMRC, adding that they would “update the guidance with information about how to do this in due course.”
The U.K.’s adoption of the CARF is part of a broader effort by the country to improve transparency in digital asset tax reporting and establish a more robust regulatory framework to protect consumers and make the U.K. a digital asset hub.UK’s changing regulatory landscape
In April, the U.K. Treasury published draft digital asset regulation and indicated that it plans to work with the United States to support innovation across the digital asset industry.
“Through our Plan for Change, we are making Britain the best place in the world to innovate — and the safest place for consumers,” said Chancellor of the Exchequer Rachel Reeves, in an April 29 statement. “Robust rules around crypto will boost investor confidence, support the growth of Fintech and protect people across the UK.”
Under the new draft rules, digital asset exchanges, dealers and agents would be brought under the U.K.’s financial services regulatory regime, and digital asset firms with U.K. customers would have to meet clear standards on transparency, consumer protection and operational resilience—”just like firms in traditional finance,” said the Treasury.
The draft regulations would also provide clear definitions for digital assets and extend existing financial regulations to companies involved.
The Treasury draft was short on specifics, but on the subject of stablecoins—a top priority for many regulators and lawmakers around the globe in recent months—it provided some additional clarity, stating that stablecoin issuers would only be subject to regulation if based in the country.
The government said it aimed to finalize the new legislation by the end of the year and that the rules would build on initial Treasury proposals outlined in a February 2023 consultation on the Future Regulatory Regime for Cryptoassets.
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