London, 1 January 2026 — The United Kingdom has entered a new chapter in its regulation of digital assets, as the Crypto-Asset Reporting Framework (CARF), an OECD-backed international reporting standard, comes into force. From today, cryptocurrency platforms that serve UK residents are required to collect detailed user and transaction data, marking a decisive shift in how crypto activity is monitored for tax purposes.
According to The WP Times, citing the Financial Times, this regime — which has been under development since 2021 — obliges exchanges, custodial wallets and other crypto service providers to begin gathering information that HM Revenue & Customs (HMRC) will eventually use to verify tax compliance. The move signals a step away from the relative opacity that has characterised the cryptomarket and closer alignment with the reporting standards that apply to traditional financial assets.
A framework designed for transparency
CARF was developed under the auspices of the Organisation for Economic Co-operation and Development (OECD) to address a long-standing gap in international tax transparency.
Under the new rules, platforms must collect and prepare to report the following details for all users who are UK tax residents:
- Identity and tax residency information, including documented proof of residence and Tax Identification Numbers;
- Comprehensive transaction history, with dates, values and types of crypto dispositions;
- Details of all “disposal” events, including sales, exchanges, payments and transfers that may trigger capital gains liabilities.
These requirements mirror existing standards applied to bank accounts and brokerage intermediaries under the Common Reporting Standard (CRS), extending them to cover cryptoassets. Importantly, CARF is not a UK-only initiative: it represents a growing global consensus among more than 50 participating jurisdictions to share taxne-related data on digital assets.
What begins today — and what comes next
It is important to distinguish between the start of data collection and the moment HMRC actually receives and uses it. From 1 January 2026, crypto platforms must begin collecting, verifying and storing the required data. They must also be prepared to submit annual reports to HMRC by 31 May 2027, covering the calendar year 2026.
Once submitted, this information will not only inform HMRC’s domestic compliance work but will be shared automatically with other participating tax authorities beginning in 2027, enabling cross-border enforcement and exchange of information. The UK’s adoption of CARF represents one of the first large-market implementations of the standard, putting London alongside jurisdictions such as Japan and Canada that have announced similar timelines.
Implications for investors and traders
From the taxpayer’s perspective, the fundamental tax rules in the United Kingdom have not changed: profits and gains arising from crypto-asset disposals remain subject to Capital Gains Tax, and certain crypto-related activities may trigger Income Tax depending on the circumstances.
What has changed is the visibility of transactions to HMRC. In the past, HMRC often relied on voluntary disclosures by taxpayers or triggered enquiries through random audits. Now, with systematic reporting in place, the likelihood that cryptocurrency gains will be matched against individual tax returns has increased significantly.
Self-assessment tax returns already include sections for declaring gains and losses from cryptoassets. Under the new regime, those figures will be corroborated — or challenged — by data directly supplied by service providers.
Demystifying taxable events
A particular area of confusion for investors has been the definition of a taxable event. In UK tax law, disposal events that can give rise to Capital Gains Tax include:
- Selling crypto for fiat currency;
- Exchanging one cryptoasset for another;
- Using crypto to acquire goods or services;
- Gifting crypto assets to non-spouses.
Each of these transactions may generate a gain or loss calculated with reference to cost basis and fair market value; under CARF, platforms will capture the requisite data to determine those values.
London’s unique exposure
London is home to one of the most active and diverse crypto communities in Europe, spanning institutional investors, tech founders, freelancers paid in digital assets and international residents maintaining crypto portfolios. This concentration of sophisticated and high-income taxpayers has made the city a focal point for HMRC’s enhanced reporting regime.
Equally, many Londoners hold assets across multiple exchanges and wallets. CARF’s data-collection requirements are designed to close the gaps that arise when users spread activity across services in different jurisdictions.
Platform obligations and compliance
The CARF regime places crypto platforms under a compliance burden comparable to that of banks and securities brokers. Under UK law, any crypto-asset service provider serving British tax residents must now identify users, determine their tax residency and record detailed transaction data in a form that can be inspected by HM Revenue & Customs.
Platforms are required to collect verified information on:
- customer identity and tax residence,
- the type of crypto-asset traded,
- the date and value of each transaction, and
- whether the transaction constitutes a taxable “disposal”, such as a sale, exchange or payment.
This data must be retained for at least five years and stored in a secure, auditable format. Providers must also register with HMRC and be able to produce electronic reports that meet the technical standards of the CARF system.
The compliance regime is enforceable. UK regulations allow HMRC to impose financial penalties on platforms that fail to report, submit late or provide incomplete or inaccurate data, as well as for inadequate record-keeping. In practice, this means exchanges and wallet providers face real financial and regulatory consequences if they treat reporting as a formality rather than a legal obligation.
For international platforms operating in London, the burden is heavier still. Because CARF operates as a cross-border tax transparency network, firms must ensure that customer data collected in the UK is consistent with reporting obligations in other participating jurisdictions. A failure in one country can now expose a provider to scrutiny in many.
The effect is to place crypto service providers firmly within the same compliance architecture as the traditional financial system — a shift that reflects regulators’ determination to bring digital assets out of the shadows and into the taxable mainstream.
The broader tax transparency landscape
The UK’s adoption of CARF is part of a much wider shift in how governments tax a globalised, digital economy. For more than a decade, international regulators have been closing the gaps that allowed wealth to move across borders faster than tax authorities could track it. Banking secrecy has largely disappeared, offshore accounts are now routinely reported, and investment platforms already exchange information under the OECD’s Common Reporting Standard.
Crypto was one of the last major blind spots in that system. Digital assets could be held, traded and moved globally with limited third-party reporting, creating a structural risk that large volumes of taxable income would remain outside the reach of national tax authorities. CARF is designed to eliminate that gap by treating crypto platforms in the same way as banks and brokers.
British policymakers have framed this not as a crackdown on innovation but as a necessary condition for crypto to exist inside the regulated financial system. Without transparency, regulators argue, digital assets cannot be trusted by mainstream institutions, pension funds or consumers.
The policy has, however, divided opinion. Some in the industry warn that the compliance burden will be heavy, particularly for smaller platforms and start-ups, potentially reinforcing the dominance of large global exchanges. Others worry that privacy-conscious users may be pushed towards decentralised systems beyond the reach of regulators.
Supporters counter that clearer rules and predictable tax treatment will ultimately benefit both investors and the market. By making crypto reporting routine rather than exceptional, CARF aims to move digital assets from a speculative fringe into the established financial economy — where rights, obligations and protections are clearly defined.
What investors should consider now
For individuals with crypto holdings, the introduction of CARF turns record-keeping from a best practice into a necessity. Investors should ensure that every transaction across every exchange and wallet they have used is fully documented, including dates, values and the original cost of acquisition. Missing or incomplete data can make it difficult to calculate gains accurately and may expose taxpayers to challenges once HMRC receives independent records from platforms.
Those who file self-assessment tax returns should pay particular attention to the crypto sections, which now sit alongside shares and property as routinely reportable assets. Investors with complex trading histories, large portfolios or activity across multiple jurisdictions may wish to obtain professional tax advice to confirm that past filings are consistent with the data that exchanges will begin reporting under CARF.
As information from platforms is collated and transmitted, HMRC’s ability to cross-check individual tax returns against third-party records will increase sharply. Discrepancies that might previously have gone unnoticed will be easier to identify, making voluntary correction and accurate reporting more important than ever.
- 1 January 2026 — Crypto platforms in the UK begin collecting data under the OECD’s Crypto-Asset Reporting Framework (CARF).
- 31 May 2027 — First reporting deadline to HMRC for data covering the 2026 calendar year.
- From 2027 — Automatic international exchange of crypto tax data begins among participating countries.
- Tax law unchanged — Crypto disposals remain taxable under existing UK rules; CARF significantly strengthens enforcement and verification.
That is why, in 2025, British patients still live between prescriptions and prosecutions. Read about the life of Westminster and Pimlico district, London and the world. 24/7 news with fresh and useful updates on culture, business, technology and city life: British Gas bills rise in January as Ofgem lifts the price cap while April cuts promise relief
