The United Kingdom HMRC has ordered cryptocurrency exchanges to share user data as it intensifies its efforts to recoup £300 million in taxes in the new year. The new development is a part of the new tax rules that came into effect on January 1, 2026, amid moves by His Majesty’s Revenue and Customs to boost taxes from the crypto sector.
According to reports, failure to follow the new guidelines could see users face several penalties. The guidelines include sharing accurate personal information that the HMRC can use to link users’ crypto accounts to their tax records. This ensures that digital assets platforms collect the required amount of data and report it to the HMRC to ensure their users pay the correct amount of tax.
HMRC wants crypto platforms to collect accurate user data
According to reports, the new rules are designed to make it difficult for crypto investors to evade Capital Gains Tax (CGT) on their trading gains. It also forms part of a move to bring tougher regulations to the ever-growing cryptocurrency industry. Over the past few years, HMRC has struggled with collecting taxes from investors, especially from those who buy low and sell high. However, these changes are expected to bring in around £300 million in additional tax.
Investors have been asked to share identifying details such as their names, date of birth, insurance or tax identification number, and address or country of residence. The rules apply to all platforms where users are allowed to buy, sell, transfer, or exchange digital assets, or have such transactions done on their behalf. It will also cover all digital assets and not just cryptocurrencies. The rules are part of the Cryptoasset Reporting Framework (CARF), an agreement signed to share information across several countries.
HMRC will receive information on investors based in the UK who have used crypto platforms located in other CARF-compliant countries. According to the HMRC, users have been mandated to pay taxes, with digital assets subjected to CGT when investors dispose of them. These include selling, exchanging, spending, and giving them away (unless it is specified that it is to a spouse, civil partner, or charity). According to the tax law, once a user has disposed of a digital asset, they are mandated to pay a percentage of the profit they made before the assets were sold.
Tax-free allowance pegged at £3,000
There is a tax-free allowance for CGT, which currently stands at £3,000. This means that if the total gains from taxable investments do not exceed £3,000, the users would not be mandated to pay any tax. However, if the gain exceeds the threshold, the user needs to calculate and pay tax. In addition, investors are allowed to offset gains against losses to pay less tax. This means that investors can report losses of about four years after the end of the tax year.
According to the HMRC, Investors who realize they should have paid CGT on their crypto gains in the past year can still do so through its voluntary disclosure scheme. This applies to all gains made before April 2024, as the self-assessment deadline for the 2024/25 tax year is not until January 31, 2026. Also, traders would not need to pay tax on their crypto profits if they dispose of their holdings gradually and ensure they fall within the CGT tax-free threshold of £3,000.
In addition, investors can make tax-free crypto investments by investing in crypto ETNs (exchange-traded notes), held in an ISA. “Initially, cETNs will be automatically eligible for inclusion in stocks and shares ISAs. From 6 April 2026, they will be reclassified as qualifying investments within the Innovative Finance ISA (IFISA),” HMRC said. It is unclear why the HMRC made the decision, but users can still take advantage of the tax-free ISA to invest in digital assets.