CARF in motion: UK targets 2026 implementation of crypto tax reporting rules

The United Kingdom’s HM Revenue & Customs (HMRC) has announced that from 1 January 2026, all UK-based ‘reporting cryptoasset service providers’ (RCASPs) will be required to collect and report user and transaction data, in line with the Organisation for Economic Co-operation and Development’s (OECD) Cryptoasset Reporting Framework (CARF).

According to HMRC, a business will be classified as an RCASP if it either transacts cryptoassets on behalf of users or provides a means for users to transact cryptoassets. This includes, for example, cryptoasset exchanges, brokers and dealers. 

The UK is not only implementing the CARF as an international standard but is also extending the reporting framework to apply to domestic reporting obligations. The move is part of a broader effort to increase transparency in the growing crypto sector and prevent tax evasion using digital assets.

For individual users, service providers must collect the full name, date of birth, home address, country of residence and either a National Insurance number or Unique Taxpayer Reference for UK residents. For non-UK residents, providers must obtain the individual’s tax identification number and the country where it was issued.

For entity users, providers must gather the legal business name and main business address. For UK companies, the company registration number must be reported, while non-UK entities require a tax identification number and issuing country. Information about controlling persons may also be necessary. ‘Users’ will include those who are tax resident in the UK, or another country that is signed up to CARF rules.

Each transaction must include the transaction value, the type of cryptoasset involved, the nature of the transaction and the number of units.

Although the rules officially come into effect on 1 January 2026, HMRC is encouraging service providers to begin preparations early. Firms are advised to start collecting the required data ahead of the deadline and to implement due diligence processes to verify the accuracy of the information collected. Failure to comply with the reporting obligations, or submission of inaccurate or unverified reports, may result in penalties of up to £300 per user.

HMRC is expected to release further guidance in the lead-up to the implementation date.

Australia conducted its own consultation on CARF implementation earlier this year seeking guidance how best to implement domestic standards. The response to that consultation and any legislative proposals for implementation are awaited.

By Steven Pettigrove and E Assaf