HMRC Crypto Asset Reporting Regulations & Guidance

UK Cryptoasset Reporting Rules

The OECD developed the Crypto-asset Reporting Framework (CARF) to enhance transparency and combat tax evasion in the crypto-asset market. Jurisdictions implementing CARF must enact local legislation by the end of 2025 for tracking transaction activity starting 1st January, 2026.

HMRC's regulations ensure accurate reporting of crypto-asset transactions, helping tax authorities detect and address non-compliance. This aligns with international efforts to standardize reporting and improve financial system integrity.

In April 2025, HMRC also announced proposals to update existing rules related to non-tax specific regulatory classifications and definitions. Specifically, the proposals were intended to create new regulated activities for cryptoassets, requiring firms wishing to provide crypto services in or to the UK to be authorised and supervised by the Financial Conduct Authority (FCA).

Summary of Draft CARF Regulations

HMRC shared a draft of the pending CARF regulations in order to gather public feedback by the end of January 2025. With the goal to implement CARF, and update the CRS legislation, over 30 public letters were received to help guide the direction/acceptance of these regulations. HMRC intends to follow the OECD guidance published in 2023, with the following highlights:

• Define Crypto-Asset Service Providers (CASPs): Entities facilitating crypto-asset transactions must comply with reporting and due diligence requirements.

• Due Diligence: introduced to align with existing CRS requirements.

  • Processes and Procedures: keep a record of steps taken to comply with regulation. This will be critical in any future audit review. Documentation must be retained for no less than five years.

  • Identification: identify and verify the identity of the crypto-asset user by using self-certification forms, including the tax identification number and date of birth.

• Reportable Transactions: Includes transfers, exchanges, and other transactions involving crypto-assets.

  • There is also an introduction of making the UK a reportable jurisdiction. This means for both CARF and CRS reporting, a UK institution will now be expected to report UK taxpayer details under the new legislation.

• Compliance and Enforcement:

  • Penalties: Non-compliance may result in significant penalties.

    • Failure to comply with record-keeping requirement

    • Late or inaccurate reporting

    • Failure to register with HMRC as a reportable entity

  • Audits: Regular audits will be performed to ensure compliance with the regulations. If any non-compliance is identified, there will be a penalty if the CASP fails to provide necessary information to HMRC. Also, if identified under audit, there can be an additional penalty for failure to notify taxpayer that their information is being shared with tax authority.

• Implementation Timeline: Regulations expected to be finalized in 2025 to align the introduction of domestic reporting for CARF starting with transactions and data collection from 1 January 2026 with first reporting on 31 May 2027.

How Can TAINA Help?

In summary, HMRC is in line to complete their necessary regulations to align with the OECD led CARF initiative, ensuring accurate reporting of crypto-asset transactions and addressing non-compliance internationally. The draft CARF regulations include due diligence and reporting requirements for Crypto-Asset Service Providers (CASPs), with penalties for non-compliance and regular audits.

With this focus in the due diligence requirements, a firm should focus on automating repetitive processes. The TAINA Platform takes relieves the burden of CRS self-certification form collection and validation, as well as support to ensure accurate reporting in an integrated seamless end-to-end process. 

We would love to talk to you more about your current documentation validation process and how our award-winning CRS self-certification form Validation platform may add value to your organization.

For more information on how our fully automated platform can add value to your business, get in touch or request a demo to see it in action.