HMRC is set to gain significantly greater access to information about UK cryptoasset activity under the new Cryptoasset Reporting Framework (CARF).
Introduced on 1 January 2026, CARF requires cryptoasset platforms and exchanges operating in the UK to collect and report user and transaction data to HMRC. The first reports, covering transactions during 2026, are due by 31 May 2027, with the first international exchange of this information expected by 30 September 2027.
For anyone who has bought, sold, exchanged, staked or otherwise transacted in cryptoassets, now is a sensible time to review their tax position.
How widely are cryptoassets held in the UK?
Cryptoasset ownership among UK adults reached 12% in 2024, according to consumer research carried out for the Financial Conduct Authority, before falling to 8% in 2025.
Despite this reduction, ownership remains around twice the level recorded in 2021. The FCA’s research also indicates that those who continue to hold cryptoassets are typically holding larger balances than in previous years.
For some investors, their crypto activity may be relatively straightforward. However, tax reporting can become considerably more complex where transactions involve:
- Multiple exchanges or wallets
- Swaps between different cryptoassets
- Staking rewards
- Mining income
- Decentralised finance (DeFi) arrangements
- NFTs
- Overseas platforms
- Historic transactions spanning several tax years
When can a crypto transaction create a tax liability?
One of the most common misconceptions is that tax only becomes relevant when cryptocurrency is converted back into pounds sterling.
For UK tax purposes, a disposal can occur in a much wider range of circumstances. This can include exchanging one cryptoasset for another, meaning that investors may have tax reporting obligations even if they have never converted their crypto holdings into traditional currency.
This makes accurate record keeping particularly important for anyone who has carried out a significant number of transactions.
What does CARF change?
HMRC has been developing its understanding of cryptoasset activity for several years. CARF represents a significant further step by requiring platforms and exchanges to collect and report detailed information about users and their cryptoasset transactions.
The first reporting deadline will cover activity during the 2026 calendar year, with information due to HMRC by 31 May 2027.
International information sharing is also expected to increase, with the first exchange of CARF data between participating countries expected by 30 September 2027.
For investors who have previously relied on the limited visibility of crypto transactions, this represents a significant change.
Should crypto investors be concerned?
Not necessarily.
Many crypto investors will already have reported their transactions correctly and may have nothing to be concerned about.
However, issues can emerge when records are reviewed, particularly where investors have:
- Used several exchanges or wallets
- Made transactions over multiple tax years
- Exchanged one cryptoasset for another
- Earned staking or mining income
- Used overseas platforms
- Been involved in DeFi or NFT transactions
- Not fully understood the tax treatment of historic transactions
Where historic issues do exist, addressing them voluntarily before HMRC begins a formal review can generally be a better position than waiting for an enquiry or compliance check.
There may also be opportunities to regularise historic tax issues through HMRC’s disclosure facilities before a formal enquiry begins.
What should crypto investors do now?
With CARF increasing the information available to HMRC, investors should consider reviewing their crypto activity and ensuring their records are complete and accurate.
This could include bringing together transaction histories from different exchanges and wallets, reviewing disposals across previous tax years and checking whether staking, mining or other crypto-related income has been appropriately considered.
It is also worth remembering that cryptoasset tax can involve both capital gains and taxable income, depending on the nature of the activity.
Taking a proactive approach now could help identify potential issues before the new reporting arrangements provide HMRC with additional information.
How Price Bailey can help
Price Bailey’s tax specialists regularly assist clients with a range of cryptoasset tax matters, including:
- Reviewing cryptoasset transactions and tax reporting
- Responding to HMRC nudge letters
- Calculating capital gains and taxable income
- Making voluntary disclosures to HMRC
- Dealing with HMRC enquiries and compliance checks
- Advising on complex international and cross-border issues
For anyone who has bought, sold, exchanged, staked or otherwise dealt with cryptoassets and is unsure whether their tax reporting is correct, now is a sensible time to seek advice.
As CARF increases HMRC’s access to cryptoasset information, a proactive review could help investors identify and resolve potential issues before they become more costly or complicated.
To discuss your position in confidence, contact the Price Bailey Tax team.