Major crypto tax changes are coming to the UK.
Starting January 2026, new regulations will overhaul how cryptoassets are reported to HM Revenue & Customs (HMRC). These changes are designed to boost tax transparency and ensure crypto investors and businesses pay the right amount on their profits.
Whether you're trading, investing, or running a crypto business, staying ahead of these updates is essential. This guide will break down the current rules, what’s changing, and how to prepare for the shift. Don’t get caught off guard—get informed now!
What Are the Current Crypto Tax Rules?
Understanding Crypto Taxes in the UK: What You Need to Know
Navigating cryptocurrency taxes in the UK can feel complex, but staying compliant with HMRC is essential. Here's a breakdown of how taxes apply to your crypto-related activities and what the upcoming changes could mean for you.
Who Is Responsible for Reporting Crypto Taxes?
Under current rules, individuals and businesses are responsible for tracking and reporting their crypto transactions to HMRC. Depending on the type of transaction, you may be liable for Capital Gains Tax (CGT) or Income Tax.
Capital Gains Tax (CGT): What It Covers
Capital Gains Tax is due when you "dispose" of your cryptoassets. Disposing includes:
- Selling crypto for cash.
- Swapping one type of cryptocurrency for another.
- Using crypto to pay for goods or services.
- Gifting crypto to someone (other than a spouse or civil partner).
You must report and pay CGT if your total gains exceed the annual tax-free allowance. Always keep detailed records of your transactions to calculate your liability accurately.
Income Tax and National Insurance: When They Apply
Income Tax and National Insurance may apply if you receive cryptoassets as:
- Payment for employment.
- Rewards from activities like mining, staking, or airdrops.
These transactions are treated as earnings and must be declared in your Self Assessment tax return.
Why Is HMRC Overhauling Crypto Tax Rules?
Currently, HMRC relies on taxpayers to voluntarily report their crypto activities. However, the decentralised and often anonymous nature of cryptoassets poses challenges for tax authorities to enforce compliance. New rules aim to improve tracking and ensure accurate reporting, which means stricter measures could be on the horizon.
What Is Changing in January 2026?
From 1 January 2026, the UK government will introduce new tax reporting rules for cryptoassets. These changes are based on the Organisation for Economic Co-operation and Development's (OECD) Crypto-Asset Reporting Framework (CARF).
What does this mean for you? The new rules will require UK-based cryptoasset service providers to automatically report customer transaction information directly to HMRC.
These service providers include:
- Crypto exchanges
- Wallet providers
- NFT marketplaces
This marks a significant shift from the current system, where HMRC relies on individuals to self-report their crypto activities. Under the new rules, platforms will provide your data directly to the tax authority, allowing for automatic cross-referencing with your tax records.
Why Are These Crypto Tax Rules Changing?
The primary goal of these changes is to increase tax transparency and close the "tax gap"—the difference between the tax that should be paid and what HMRC actually collects. By gathering data directly from service providers, HMRC aims to ensure that all crypto-related earnings are accurately reported and taxed.
James Murray MP, Exchequer Secretary to the Treasury, explained that the new rules will "make sure tax dodgers have nowhere to hide." The government estimates these measures will help raise up to £315 million in additional tax revenue by April 2030.
To stay compliant and avoid penalties, it's crucial to keep detailed records of your crypto transactions now and stay informed about the evolving regulations.
What Crypto Investors Need to Know
To prepare for these changes, it’s essential to understand what information you will be required to provide and the consequences of not complying. The new rules apply to both individual investors and entities like companies, partnerships, and charities.
What information will I need to give crypto asset service providers?
From 1 January 2026, you must provide specific identifying details to every cryptoasset service provider you use, regardless of whether they are based in the UK or abroad.
If you are an individual user, you must provide:
- Your full name
- Your date of birth
- Your primary address and country of residence
- Your Tax Identification Number (TIN). In the UK, this will likely be your National Insurance number or your Unique Taxpayer Reference (UTR).
If you are a business or other entity, you must provide:
- Your legal business name
- Your main business address
- Your company registration number (for UK companies)
- Your Tax Identification Number and its country of issue (for non-UK companies)
This information allows HMRC to accurately link your crypto transactions to your tax profile.
What happens if I don’t provide this information?
Failing to provide accurate information to your cryptoasset service provider can lead to significant penalties. Here's what you need to know:
Penalties for Users
- Fine Amount: Up to £300
- Reason: Providing inaccurate details or failing to provide required information.
Penalties for Service Providers
- Fine Amount: Up to £300 per user
- Reason: Failing to collect or report required information, or submitting incomplete/inaccurate reports.
Key Takeaway
Service providers are highly motivated to collect accurate details from their customers to avoid penalties. Ensure your information is correct to avoid fines and ensure compliance.
Get Your Crypto Tax Affairs in Order with Debitam
Big changes are coming to crypto tax laws in 2026, bringing stricter regulation and transparency. HMRC will have unprecedented access to crypto transactions, making compliance more critical than ever for small businesses dealing with crypto—whether as payments, investments, or treasury assets.
Managing crypto taxes can be tricky, but Debitam makes it easy. Our expert team helps small businesses:
- Stay compliant with new rules.
- Keep accurate records and avoid penalties.
- File crypto tax returns correctly and stress-free.
Don’t wait—prepare now for the new reporting era. Contact Debitam today for expert crypto tax support!
