HMRC Releases New Guidance on Cryptoasset Reporting Obligations: What UK Service Providers and Users Need to Know

On 14 May 2025, HM Revenue & Customs (HMRC) officially launched a new webpage to provide comprehensive guidance on the Cryptoasset Reporting Framework (CARF), signalling a significant shift in the UK’s regulatory landscape for digital assets. This move, aligned with the OECD’s global tax transparency initiative, reinforces the UK's commitment to maturing the crypto market and introducing stricter oversight of crypto-related transactions.

Background: What Is CARF and Why It Matters

The Cryptoasset Reporting Framework (CARF) is an international initiative developed by the Organisation for Economic Co-operation and Development (OECD). Its goal is to combat tax evasion by ensuring that cryptoasset service providers collect and report user data in a standardised, cross-border format, akin to the Common Reporting Standard (CRS) for financial accounts.

The UK is not only adopting CARF for cross-border exchange of information but also extending its scope to include domestic reporting, thereby covering all cryptoasset service providers based in the UK, whether or not their clients are UK residents.

This initiative is a major milestone in the evolution of cryptoasset regulation, offering both challenges and clarity for market participants. As highlighted by CryptoUK and other industry representatives, HMRC’s publication is the result of extensive dialogue with the sector.

Key Timeline

• 1 January 2026 – UK cryptoasset service providers (RCASPs) must begin collecting user and transaction data.

• 31 January 2027 – Deadline to register with HMRC’s online reporting portal (yet to be launched).

• 31 May 2027 – First reporting deadline for 2026 data.

Who Must Report? Understanding RCASPs

An entity will qualify as a Reporting Cryptoasset Service Provider (RCASP) if it either:

• Transacts cryptoassets on behalf of users, or

• Provides the means for users to transact cryptoassets, such as via an exchange, brokerage, or crypto wallet service.

  
  

These obligations apply if the business is considered UK-based, defined by any of the following criteria:

• Tax resident in the UK

• Incorporated in the UK

• Managed from the UK

• Operating a UK branch or permanent establishment

Where multiple jurisdictions are involved, CARF applies a reporting hierarchy (with tax residency taking priority) to determine the reporting country.

What Data Must Be Collected?

For Individual Users:

• Full legal name

• Date of birth

• Home address and country of residence

• UK residents: National Insurance number or Unique Taxpayer Reference (UTR)

• Non-UK residents: Tax Identification Number (TIN) and issuing country (if applicable)

For Entity Users (companies, partnerships, trusts, charities):

• Legal name

• Main business address

• UK entities: Company registration number

• Non-UK entities: TIN and country of issue

• In some cases, information about controlling persons must also be provided

Transaction-Level Reporting Requirements

For each cryptoasset transaction, providers must collect:

• Transaction value

• Type of cryptoasset (e.g. bitcoin, NFT, stablecoin)

• Type of transaction (e.g. exchange, transfer, payment)

• Number of units transacted

Providers are required to implement due diligence procedures to verify the accuracy and completeness of this data — with HMRC expected to publish further verification guidelines shortly.

User Obligations and Penalties

Users of cryptoasset services will, from 1 January 2026, be required to provide the above details to every platform they engage with, even if the provider is not UK-based. The failure to provide or update accurate information may result in penalties of up to £300.

Service providers, similarly, face significant penalties for:

• Failure to report,

• Late submissions,

• Inaccurate or unverified data.

Cross-Border Information Sharing

As part of the OECD framework:

• HMRC will share data with foreign tax authorities if a UK-based service provider serves non-UK residents in participating jurisdictions.

• Conversely, non-UK service providers will share data with HMRC when serving UK users — a critical shift towards global tax interoperability in the digital space.

  
  

Tax Implications for Users

The guidance reiterates the existing UK tax rules applicable to cryptoassets:

• Capital Gains Tax (CGT) applies on disposals — including sales, gifts, exchanges, and purchases made using crypto.

• Income Tax and NICs may apply to crypto received via employment, mining, or airdrops.

• Unreported tax liabilities can be regularised through HMRC’s disclosure facility.

Why This Update Is Significant?

This is more than a compliance bulletin — it represents the UK Government's clear intent to mainstream crypto within the regulated financial system:

🔹 Clarity – The guidance provides long-needed transparency on what’s expected from providers and users.

🔹 Credibility – Aligning with OECD standards enhances the UK’s stature as a responsible and competitive hub for digital assets.

🔹 Accountability – Cross-border data sharing ensures tax compliance is no longer jurisdictionally siloed.