UK Expands Crypto Reporting to Include Domestic Transactions

UK Tightens Grip on Crypto Tax Compliance

Starting in 2026, the United Kingdom will mandate that domestic crypto platforms report all transactions made by UK-resident users. This expansion of the Cryptoasset Reporting Framework (CARF) marks a significant move towards enhanced tax compliance.

This change will grant His Majesty’s Revenue and Customs (HMRC) — the UK’s tax authority — automatic access to both domestic and cross-border crypto data for the first time. This tighter control precedes CARF’s inaugural global information exchange scheduled for 2027.

Understanding the Cryptoasset Reporting Framework (CARF)

CARF, an initiative of the Organisation for Economic Co-operation and Development (OECD), is a framework designed for the automatic cross-border exchange of crypto transaction data among tax authorities worldwide. Its rules necessitate that crypto asset service providers perform due diligence, verify user identities, and report detailed transaction information on an annual basis.

According to a policy paper released by HMRC, the framework primarily addresses cross-border activity. This implies that crypto transactions occurring solely within the UK would not be subject to automatic reporting. By broadening the scope to encompass domestic users, the government aims to prevent crypto from evolving into an “off-CRS” asset class, thereby avoiding the oversight applied to traditional financial accounts under the Common Reporting Standard.

Streamlining Reporting and Unifying the Approach

UK officials assert that this unified approach will streamline the reporting process for crypto companies while providing tax authorities with a more comprehensive dataset. This enhanced data will aid in identifying noncompliance and accurately assessing taxpayer obligations.

Furthermore, the UK proposed a “no gain, no loss” tax framework that would defer capital gains liabilities for Decentralized Finance (DeFi) users until the point at which they sell the underlying tokens. This proposal has been widely welcomed by the local industry.

Global Trend: Increased Crypto Tax Oversight

As crypto assets become increasingly integrated into the mainstream financial system, governments worldwide are updating their tax regulations to capture digital asset activity more effectively and consistently.

In South Korea, the National Tax Service announced in October its intention to seize cryptocurrency held in cold wallets and conduct home searches for hardware devices in cases where taxpayers are suspected of concealing digital assets to evade obligations.

More recently, Spain's Sumar parliamentary group proposed raising the top tax rate on crypto gains to 47%, according to local reports. The proposed amendments would classify crypto profits as general income and impose a flat rate of 30% for corporate holders.

Switzerland announced a postponement of the start of automatic crypto information exchange with foreign tax authorities until 2027 to determine which countries it will share data with. CARF rules will still be integrated into Swiss law on Jan. 1, but their rollout has been delayed, and transitional measures are planned to ease compliance for domestic crypto firms.

Meanwhile, in the United States, Representative Warren Davidson introduced a bill in November proposing that Americans be allowed to pay federal taxes in Bitcoin, with these contributions being channeled into a strategic national BTC reserve. This proposal, known as the Bitcoin for America Act, would exempt these payments from capital gains taxes by treating the transferred Bitcoin as neither a gain nor a loss for the taxpayer.