HMRC Crypto Tax Fines to become automatic: New Crypto Tax Reporting Rules

Date: July 15, 2025

HMRC crypto tax fines will soon be automatically issued to exchanges, brokers or dealers who do not declare information relating to their users. This is under a new global tax initiative: The Crypto Asset Reporting Framework (CARF). These regulations will require platforms to share detailed information or face fines of up to £300 per user.

This framework will result in information regarding the users of exchanges to be shared to HMRC, allowing them to identify any potential non-compliance. This may result in fines for individuals if they have not declared their cryptoassets to HMRC. Non or under-disclosure can also lead to tax investigation and, for the most serious cases, criminal prosecutions.

Published by Alexander & Co | Expert Chartered Accountants and Tax Advisors who specialise in crypto tax matters

UK Crypto Tax: HMRC Disclosure Rules Began Before CARF

Although CARF officially begins in 2026, HMRC already requires the disclosure of crypto assets. A new section has been added to the Capital Gains pages of self-assessment tax returns, specifically for crypto.

Taxpayers must now report:

Capital gains from selling or exchanging crypto (e.g., Bitcoin, Ethereum, Dogecoin)
Income from employment (paid in crypto), staking, mining or crypto lending

“These new reporting requirements will give us the information to help people get their tax affairs right,” said Jonathan Athow, HMRC’s director general for customer strategy. (Source: a news release published on M yNewsDesk by HM Revenue & Customs Press Office.)

HMRC Crypto Tax Fines: £300 Penalties Automatically applied for Non-Compliance

In addition to information already shared with HMRC by crypto platforms, starting 1 January 2026, UK-based crypto service providers must collect and report key user data to HMRC:

Full name, address, date of birth
Tax residence and National Insurance/tax reference
Details of crypto transactions, which includes type, value, quantity, and dates

Failure to comply will result in a £300 fine per user in addition to penalties for late or inaccurate submissions.

A business is considered a reporting cryptoasset service provider if it either:

Transacts cryptoassets on behalf of users
Provides a means for users to transact cryptoassets.

Examples of this include exchanges, brokers and dealers.

What Is CARF and How Will It Work?

CARF is a new international framework designed by the OECD to share crypto tax data between countries. The UK is among the first to adopt it, with enforcement starting in 2026. Over 52 countries have committed to CARF, including:

UK, EU, Guernsey, Jersey, Isle of Man
South Africa, Uganda (by 2027)
Hong Kong, Singapore, Thailand, UAE, (by 2028)

HMRC will have full details of all UK crypto users, including all their transactions and assets held.

Crypto Usage in the UK: Seven Million individuals Could be Affected

The Financial Conduct Authority (FCA) estimates that 7 million UK residents, or 12% of the population now hold crypto. This is up from a rate of 10%, recorded in 2023 (Source: FCA).

This rapid growth, coupled with Bitcoin’s price surge from £38,000 in August 2024 to £86,000 in January 2025, has intensified HMRC’s scrutiny.

It is estimated by the UK Treasury Office that the CARF enforcement could subsequently recover £315 million in unpaid crypto tax by 2030.

How to Avoid HMRC Crypto Fines

To stay compliant and avoid penalties, UK crypto investors should:

Declare crypto gains on self-assessment forms
Track all transactions, including swaps and transfers
Seek advice from a Tax professional, such as ourselves, before using the HMRC Cryptoasset Disclosure Service (CDS)

Alexander & Co can assist with all the above. Please contact us to discuss.

HMRC stated: “The data collected… will be used to tackle tax evasion, avoidance and help customers to meet their tax obligations.” (Source HMRC)

CARF: Legal Basis and Timeline

The implementation of CARF in the UK is under the following legislation:

s136 of Finance Act 2002
s349(2) of Finance (No.2) Act 2023
From January 2026, the platforms will begin collecting data, which will then be reported to HMRC. HMRC is likely to contact individuals who have not declared their crypto holdings, or where the reported data does not correlate with submitted returns.

Take action – Get Ahead of HMRC Crypto Tax Disclosure Rules

Whether you are a casual investor or seasoned trader, existing HMRC crypto disclosure rules mean you need to act now. Failing to report could trigger serious fines. Speak with our specialist crypto tax professionals at Alexander & Co to help ensure you avoid any unnecessary fines and penalties.

Need help? Contact Alexander & Co for crypto tax advice

Alexander & Co – One of the leading crypto tax advisors in the UK

Alexander & Co has a specialist team of tax advisors and accountants who can advise on all aspects of crypto tax. We advise both individuals and businesses that work or invest in the crypto industry.

To arrange your initial consultation with one of the leading crypto tax specialists, please complete the form below. You can also email info@alexander.co.uk and we will be in touch.