If you trade or invest in cryptocurrency, HMRC is tightening the rules to ensure everyone pays the correct amount of tax.
From January 2026, a new system called the Crypto Asset Reporting Framework (CARF) will come into effect, designed to make crypto tax evasion much more complicated to hide.
Here’s what you need to know and how to stay compliant.
What Is CARF?
CARF is an international reporting framework developed by the Organisation for Economic Co-operation and Development (OECD). The UK is adopting it to increase transparency and align with global standards.
From 2026, UK crypto holders will need to provide their details to crypto service providers.
This information will then be shared with HMRC.
What Information Will Be Collected?
Crypto service providers will have to report:
- Your name, address, and date of birth
- Your tax residence
- Your National Insurance number or tax reference
- A summary of your crypto transactions
If providers fail to report this information or submit inaccurate data, they could face penalties of up to £300 per user.
For individuals, failing to provide accurate details could also result in penalties.
Is This a New Tax?
No. No new taxes are being introduced for cryptocurrency. HMRC is making it easier to identify who owes tax and ensure crypto profits are reported correctly.
As Dion Seymour, former HMRC lead on CARF, explained:
No one wants to pay tax, but if they know that HMRC is going to have the information, it is going to move people towards being compliant
Self-Assessment Changes: Crypto Front and Centre
Alongside CARF, HMRC is making changes to Self-Assessment tax returns.
From 2025/26, a dedicated crypto section will be included in the capital gains pages. This makes it much harder to “forget” to declare crypto profits, and easier for HMRC to risk-assess and identify non-compliance.
Previously, crypto profits were lumped into the “other property assets and gains” box, making them harder to track.
Now, crypto will be front and centre on your return, and HMRC expects greater accuracy.
What This Means for You
If you hold, trade, or invest in crypto, now is the time to:
- Keep detailed records of all your crypto transactions
- Declare any profits correctly on your Self-Assessment
- Understand your tax position ahead of the 2026 changes
The ability to hide crypto profits is quickly disappearing, and penalties for non-compliance will be stricter.
Need Help?
At Infinity Accounting, we make taxes clear and stress-free. Whether you need help understanding how crypto fits into your tax return or want to prepare for the 2026 reporting changes, we’re here to guide you.
Contact us today and we can help you stay ahead of the changes.
