UK Launches Initiative to Tackle Crypto Tax Evasion

The United Kingdom has taken significant steps to address undeclared income from cryptocurrency assets. Newly introduced reporting obligations aim to eliminate anonymity for crypto asset holders, providing tax authorities with greater clarity on international transactions.

Strengthening Crypto Tax Reporting in the UK

According to the Financial Times, new regulations have been enacted this week in the UK and several other countries. From January 1, crypto exchanges must collect comprehensive transaction data from users, including purchase prices, sales details, and gains for tax purposes. These reports will be directly submitted to HM Revenue & Customs (HMRC) as part of the global Cryptoasset Reporting Framework (CARF) developed by the OECD. The UK is among the first 48 nations to adopt this system.

Exchanges will commence data collection immediately, but international data exchange will begin in 2027, enabling HMRC to automatically share crypto tax information with other participating countries.

Andrew Park, tax investigations partner at Price Bailey, remarked, "This marks the end for crypto investors who believed they could operate in secrecy from tax and law enforcement agencies."

For over a year, there have been increasing calls for stricter crypto taxation in the UK. In March, Lisa Gordon, chair of Cavendish Investment Bank, urged policymakers to establish a clearer crypto tax policy, citing the growing preference of young investors for digital assets over traditional equities.

Despite efforts to formally tax crypto activities, many investors continue to inaccurately report their gains, prompting regulatory attention. In September 2025, the UK and the United States formed a joint task force to enhance anti-money laundering regulations and oversight for cryptocurrency businesses operating in both countries.

Global Movement Towards Enhanced Crypto Oversight

Currently, 75 countries have agreed to implement the framework. Key financial centers like Singapore, Switzerland, Hong Kong, and the United Arab Emirates are set to begin reporting later this decade. The United States is also considering proposals to empower the IRS to monitor and tax overseas crypto holdings.

Concerns about unreported crypto gains in the UK have been on the rise for years. In early 2024, financial sector leaders advocated for more stringent taxes on digital assets. Although crypto taxation rules exist, enforcement challenges persist, with many failing to accurately report gains. Regulators highlight the high non-compliance rate, leading to calls for automated reporting systems.