HMRC expands crypto surveillance as UK tax crackdown starts

Starting Thursday, HMRC will begin collecting full transaction data from crypto exchanges as part of a coordinated global tax enforcement push, according to reporting from the Financial Times.

All major crypto exchanges that deal with UK-based users must now hand over complete records. That includes how much a person paid, how much they sold for, and how much they profited. The data must also include each user’s tax residency.

The UK is among the first 48 countries to put these rules into effect under the Cryptoasset Reporting Framework, or CARF, which was drawn up by the OECD.

The global goal is to stop people from hiding profits in crypto. Over 75 countries have signed up to follow these rules. Some jurisdictions, like Hong Kong, Singapore, the UAE, and Switzerland, will begin in 2027. The United States will start collecting in 2028 and begin sharing that data in 2029.

“This is the beginning of the end for crypto investors who thought they could invest and gain from crypto in secrecy from tax and other law enforcement agencies,” said Andrew Park, who works on tax investigations at Price Bailey.

Andrew warned that anyone living in participating countries, including the UK, should understand that their crypto records will be shared directly with their government. He also urged traders to ask themselves if they’re truly tax-compliant before it becomes a criminal issue.

Exchanges must report profits, trading history, and residency info

HMRC is building a direct pipeline of crypto information. From 2027, the agency will automatically send and receive crypto trading data with other countries. These include all EU member states, plus Brazil, South Africa, the Cayman Islands, and the Channel Islands. Every single crypto transaction tied to a UK taxpayer will be visible.

Seb Maley, who runs tax insurance company Qdos, said this is “a major shift in how crypto trading is monitored from a tax perspective.”

“HMRC will soon know exactly who is making gains — and how much,” Seb added.

Anyone who’s traded crypto in the UK and made over £3,000 in gains will now have to pay capital gains tax. But that’s not all. If HMRC believes someone is trading regularly, it may treat them like a business, which means paying income tax and national insurance.

Even non-cash transactions can count as disposals. That includes using crypto to buy stuff, trading one coin for another, or giving tokens to someone, unless they’re a spouse or civil partner. Every single one of those cases could trigger a tax bill.

UK boosts enforcement with new crypto tax section and warning letters

Dawn Register, a tax dispute specialist at BDO, said the UK government has been tracking non-compliance in the crypto space for a while.

“HMRC has been concerned for some time about high levels of non-compliance among crypto investors,” Dawn said.

She added that joining this international system gives HMRC access to “a richer dataset” and allows them “to better target those UK tax residents it suspects of failing to correctly declare their gains.”

In the 2024–25 tax year, HMRC sent out 65,000 warning letters to people suspected of owing tax on crypto, that’s up from 27,700 letters the year before.

There’s also now a voluntary disclosure facility, which gives people a chance to admit to undeclared crypto profits before April 2024. But Dawn said anyone thinking about it should talk to a tax advisor first, before HMRC knocks on their door.

This year, for the first time, the self-assessment tax form has a section specifically for crypto profits and losses. Anyone who made crypto gains during the 2024–25 tax year might need to file a tax return before January 31, according to Dawn.

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