What's happening?
Anyone in the UK who holds or trades cryptoassets will need to provide detailed personal information to every crypto service provider they use. This forms part of an expanded Know-Your-Customer (KYC) regime from HMRC, aimed at improving tax compliance across the sector.
What details will you need to share?
Crypto platforms will be required to collect the following details from all UK users:
- Full name
- Date of birth
- Home address
- Country of tax residence
- National Insurance number
These platforms will then pass this information on to HMRC, who will use it to check whether individuals are paying the right amount of tax on their crypto gains.
Why are these changes being introduced?
The main goal is to help HMRC close the tax gap by identifying those who have not been reporting profits from crypto transactions. HMRC estimates that these new rules will raise an additional £315 million in tax revenue by April 2030.
James Murray MP, Exchequer Secretary to the Treasury, said:
"We're going further and faster to crack down on tax dodgers as we close the tax gap and deliver on our Plan for Change.” “By ensuring everyone pays their fair share, the new crypto reporting rules will make sure tax dodgers have nowhere to hide, helping raise the revenue needed to fund our nurses, police and other vital public services."
What are the penalties?
Anyone who fails to provide the required details to crypto platforms could face penalties of up to £300 per offence. HMRC stress it's essential to be proactive in complying to avoid these fines, as crypto service providers will be under strict instructions to collect this information.
What does this mean for Crypto investors?
Importantly, these changes are not a new tax. If you make profit when you sell, swap or transfer your crypto, you may already have tax due under existing rules. The difference is that, from 2026, HMRC will have much more information to check whether you're paying the right amount.
Why this may be a beneficial change
Introducing more rules and regulations for cryptoassets can be a positive step towards legitimising them as both currencies and investment assets. The lack of proper regulation in the past has unfortunately led to negative perceptions, partly due to the association of crypto with criminal activity. This has made many individuals, businesses, and financial institutions reluctant to engage with crypto. Clear and robust rules will help change these perceptions and should boost confidence among investors and the wider public.
What are your next steps?
- Review your crypto holdings and transaction records: Make sure your records are accurate and up to date
- Be prepared to provide personal information: A lot of platforms already request most of the information required for this new regulation, but it is important to be proactive and review each platform you use from January 2026.
- Get your tax affairs in order: If you're unsure about your obligations, it's worth speaking to us now to review your position and ensure compliance ahead of the changes.
- Stay informed: As with any new regulation, there may be further updates or guidance closer to 2026. We'll keep you posted as more details emerge.
How we can help
At Elite Financial Accounting, we're here to help you navigate the evolving regulations of crypto taxation. If you have questions about your crypto holdings, record-keeping, or what the new KYC rules mean for you, please get in touch.