UK Crypto Users Now Required to Share Account Details with Tax Authorities
New regulations aim to clamp down on unpaid cryptocurrency taxes
From January 1, 2026, individuals in the United Kingdom who buy and sell cryptocurrency are legally required to share their account details with HM Revenue & Customs (HMRC). This measure, introduced by the UK tax agency, is designed to ensure taxpayers fulfill their obligations, including paying capital gains tax on profits from cryptocurrency transactions.
Automatic Reporting from Crypto Exchanges
Under the new rules, cryptocurrency exchanges operating in the UK—often described as analogous to banks within the crypto industry—must now automatically provide HMRC with up-to-date and accurate information on all users’ earnings. Failure to comply could result in hefty fines for these exchanges.
HMRC plans to use this data to identify investors who have made profits from crypto assets but have not reported or paid the corresponding taxes. The agency estimates that thousands of crypto owners may currently have unpaid tax bills and expects the changes to help raise at least £300 million in tax revenue over the next five years.
Context: The Growing Crypto Market and Tax Challenges
The regulation comes amid a volatile year for cryptocurrencies. Bitcoin, one of the most prominent digital currencies and often used as an indicator for the wider market, saw its price fluctuate significantly in 2025—starting the year around $93,500 (£69,500), peaking at nearly $124,500, then dropping below $90,000 by year’s end.
Investors who bought cryptocurrencies at lower prices and sold at higher values during this period are liable to pay capital gains tax on their profits. However, collecting this tax has historically been challenging for HMRC due to the anonymous nature of crypto transactions.
Dawn Register, tax dispute resolution partner at BDO, noted, "HMRC has been concerned for some time about high levels of non-compliance among crypto investors." She emphasized that the new regulations are expected to close loopholes, making it more difficult for individuals to conceal untaxed gains.
Impact on Crypto Investors and Compliance Deadlines
Investors who made gains in the 2024-25 financial year will now have to pay closer attention to their tax obligations. They may need to declare their crypto earnings through a newly introduced section in the self-assessment tax return, due by January 31. HMRC has also launched a disclosure facility encouraging voluntary declarations for those who have unpaid taxes from prior years, before April 2024. This initiative aims to help taxpayers come clean and minimize penalties.
International Cooperation and Regulatory Developments
These rules align with the Cryptoasset Reporting Framework (CARF), a set of international regulations being adopted by multiple countries. This framework facilitates cross-border information sharing between tax authorities, making it easier to monitor and enforce tax compliance on a global scale.
Meanwhile, the UK’s financial watchdog, the Financial Conduct Authority (FCA), is conducting a public consultation open until February 12, 2026, regarding further crypto industry regulations. Proposed measures include enhanced standards for crypto exchanges, greater oversight of brokers, and stricter rules around crypto lending and borrowing practices.
David Geale, FCA’s executive director for payments and digital finance, commented on the consultation: "Our goal is to have a regime that protects consumers, supports innovation and promotes trust. We welcome feedback to help us finalise these rules."
Conclusion
The UK government’s latest regulatory push highlights growing efforts to bring the cryptocurrency market within conventional tax and financial frameworks. While these measures may increase transparency and tax compliance, many investors and industry players will be closely watching how enforcement unfolds and how additional regulations shape the future of Britain’s crypto ecosystem.
Reporting by Rachel Clun with additional contributions from Joe Tidy
Source: BBC News