Big changes are coming for crypto and tax

Under a new international agreement called the Cryptoasset Reporting Framework (CARF), Cryptoasset service providers will have to report detailed information about your personal details and crypto activity directly to HMRC.

That includes:

• Your name, address and date of birth
• Your tax residence and National Insurance number
• A breakdown of all your crypto transactions, from swaps and sales to how many coins you’ve got and what they’re worth

Cryptoasset providers will now have an obligation to collect personal details from you.  Failure to provide accurate details may result in a fine of up to £300.

If that sounds intrusive, you’re not wrong – but it’s not a surprise. HMRC’s been signalling this for a while, as there have long been concerns by them about issues with identifying the owner of cryptoassets and the opportunities this could bring to avoiding tax and the potential for money laundering activities.

While platforms won’t start collecting and reporting until 2026, HMRC are already starting to implement new reporting requirements for crypto activity.

From the 2024–25 tax year, there’s a dedicated crypto section in the Self Assessment return. So, if you’ve made a gain – say, you sold some Bitcoin or swapped it for Ethereum – or earned crypto through mining, staking, lending as income, you’ll need to report it in a different manner than previously.

It doesn’t matter whether you have withdrawn any disposal proceeds in fiat currency or just reinvested/swapped crypto assets; each transaction is potentially taxable, and it is easy to overlook this.  A basic principle to look at the majority of crypto transactions is to consider them like stocks and shares, which is generally how HMRC also look at them from a taxation point of view.

If you think you might have under-reported in the past, you can use HMRC’s Cryptoasset Disclosure Service (CDS) to make things right voluntarily.  At Old Mill, we can assist you with making the correct disclosure and helping to minimise any potential penalties.  It is best to make a disclosure before being directly prompted to do so by HMRC, as the penalties can be mitigated to zero in some cases.

Here’s a simple action plan:

1. Take stock. Review your crypto transactions from April 2024 onwards. If you’ve made gains, start pulling the figures together.

2. Get clear on past years. If you’ve traded before 2024–25, have all transactions been reported?

3. Get ready for 2026. Platforms will start asking for your personal details

4. Ask for help. Crypto tax isn’t always straightforward. If you’re unsure, talk to a professional who understands crypto.

If you have any concerns about whether you have correctly reported any previous activity involving cryptoassets, then please contact us and we would be pleased to help you.

Contact Chris Watts or click here….