United Kingdom confirms new cryptocurrency reporting rules starting January 1, 2026

Source: PortaldoBitcoin Original Title: United Kingdom confirms new cryptocurrency reporting rules starting January 1st Original Link: The UK government confirmed in its 2025 Budget that it will implement new rules requiring cryptocurrency traders to provide their personal data to trading platforms starting from January 1, 2026.

Initially introduced as part of an international agreement with the Organisation for Economic Co-operation and Development (OECD), the Cryptoasset Reporting Framework (CAFR) – a framework for reporting virtual assets – requires cryptocurrency service providers to supply HM Revenue & Customs ( information about their clients, including crypto transactions and tax reference numbers.

This year's Budget confirms that “information for the first reports to HMRC will be collected from January 1, 2026, and reported to HMRC in 2027”.

Investors who do not provide the necessary data to brokers may be fined up to £300 ) around R$ 2,100(, while brokers will be fined up to £300 for each unreported client.

HMRC will then use the information provided to verify the submitted tax returns, identifying any individuals who have not correctly declared their profits from cryptocurrencies.

With this, the UK tax authority expects to collect up to £315 million )R$ 2.2 billion( in taxes by April 2030, an amount sufficient to “fund more than 10,000 newly graduated nurses for a year.”

Jonathan Athow, the Director General of Customer Strategy and Tax Structure at HMRC, explained that the updated framework does not impose a new tax on cryptocurrency investments, but merely ensures greater compliance with the existing capital gains tax.

“These new reporting requirements will provide us with the necessary information to help people regularize their tax situation,” he said. “I recommend that all cryptocurrency users check the details they will need to provide to their provider.”

Compliance Challenges

Some tax experts suggest that trading platforms may have difficulties in collecting the information that the IRS will require, such as tax reference numbers.

“As cryptocurrency users can be cautious when providing these details, providers will have a lot of work to ensure they have all the necessary information,” said Dion Seymour, Chief Technology Officer of Cryptocurrency and Digital Assets at the London-based law firm Andersen.

According to Seymour, exchanges will need to ensure that they have the necessary systems in place to register customer information and then report that information to the UK tax authority.

“The failure of providers to carry out the necessary due diligence may lead to penalties being imposed by HMRC for non-compliance with late or inaccurate reporting, record keeping, invalid self-assessments, failure to notify users subject to reporting, failure to register, and failure to apply due diligence requirements,” he added. “Penalties may be imposed per user subject to reporting, which can result in substantial fines.”

The process of adapting to new requirements can therefore be quite costly for the platforms, which in turn can be expensive for their clients.

“Although cryptocurrency exchanges are required to bear this additional compliance cost, they will inevitably pass these costs on to their customers,” said David Lesperance, managing director of Lesperance and Associates.

In an interview, Lesperance predicted that two consequences could arise from the implementation of the Crypto Asset Reporting Framework, the first being a trend towards non-compliant alternatives.

He explained: “Just as happened in the banking and brokerage world, we will initially see a migration of those who wish to continue evading taxes to institutions that do not comply with the new reporting requirements of the United Kingdom.”

However, Lesperance also believes that international alignment will eventually occur as countries “come together to create a cryptocurrency equivalent to the Common Reporting Standard and the U.S. FATCA, ultimately forcing most jurisdictions to implement reporting standards.”

Loans and staking in the United Kingdom

The HM Revenue & Customs was published on the same day as the budget, indicating that the UK government is currently inclined towards an approach that would recognize taxable events only when the gains are effectively realized ) that is, when cryptocurrencies are sold for fiat currency (.

“After several years of discussion, HMRC has outlined a proposed approach and seeks to adopt a 'no gain, no loss' strategy for the provision of cryptocurrency loans and liquidity,” Seymour explained.

However, the UK government has not yet reached a final decision on this issue, and there is no set deadline for this to happen.

As Seymour noted, “The government is assessing the situation, and the Revenue Service has been tasked with continuing to engage with stakeholders to improve any potential approach.”