UK Crypto Users Now Required to Share Account Details with Tax Authorities
From January 1st, people buying and selling cryptocurrency in the United Kingdom must share their account details with HM Revenue and Customs (HMRC) or face possible penalties. This new rule, introduced by the UK tax body, aims to ensure that all relevant taxes, including capital gains tax, are properly paid on cryptocurrency transactions.
Automatic Information Sharing from Exchanges
HMRC will begin collecting information automatically from cryptocurrency exchanges, which function similarly to banks within the crypto industry. This move is part of an effort to tackle tax evasion and recover unpaid tax revenues estimated to be in the hundreds of millions of pounds. The UK’s financial watchdog is concurrently consulting on stricter regulations for the crypto sector, aiming to address issues such as insider trading.
Background and Industry Context
The value of Bitcoin, often regarded as a benchmark for the cryptocurrency market, saw significant fluctuations in 2025. It surged from around $93,500 (£69,500) at the start of the year to a high of nearly $124,500 before ending the year below $90,000. Investors who have bought low and sold high potentially owe taxes on their gains; however, tax authorities have historically found it challenging to enforce compliance within this space.
Dawn Register, a tax dispute resolution partner at accountancy firm BDO, explained, "HMRC has been concerned for some time about high levels of non-compliance among crypto investors." She added that the new requirements would make it substantially harder for wealthy crypto holders to conceal untaxed profits.
Responsibilities for Crypto Exchanges and Penalties
Under the updated rules, cryptocurrency exchanges must provide HMRC with accurate and up-to-date reports on their users’ earnings. Failure to comply may result in financial penalties. These regulations align with the Cryptoasset Reporting Framework (CARF), an international initiative adopted by dozens of countries to facilitate cross-border cooperation between tax authorities.
HMRC estimates there are thousands of crypto owners in the UK with unpaid tax obligations and expects the new measures to recover at least £300 million over the next five years.
Tax Filing and Voluntary Disclosure
Taxpayers who realized gains from cryptocurrency transactions during the 2024-25 financial year might need to file a tax return by January 31, 2026, using a new dedicated section on the self-assessment form. Additionally, HMRC encourages voluntary disclosure from individuals who have unpaid taxes from previous years, operating a disclosure facility for those wanting to settle undeclared gains before April 2024. ### Ongoing Regulatory Developments
Alongside tax enforcement efforts, the Financial Conduct Authority (FCA) is conducting a public consultation, open until February 12, 2026, on additional proposed regulations in the crypto space. These include standards for crypto exchanges, broker responsibilities, and rules governing crypto lending and borrowing.
David Geale, the FCA’s executive director for payments and digital finance, emphasized the goal of these regulations: “Our goal is to have a regime that protects consumers, supports innovation and promotes trust. We welcome feedback to help us finalize these rules.”
Conclusion
The UK government’s recent actions mark a significant step toward regulating the cryptocurrency industry more rigorously and securing tax revenues from digital asset transactions. As this sector continues to grow and evolve, investors and service providers alike must adapt to increasing oversight and compliance requirements.
Reported by Rachel Clun, Business Reporter, with additional contributions from Joe Tidy.