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New tax rules target cryptocurrency gains
From 1 January, UK cryptocurrency investors must disclose account details to tax authorities or risk penalties, as part of efforts to recover unpaid taxes on digital asset transactions.
HMRC cracks down on tax evasion
The UK's tax authority, HMRC, will now automatically gather data from cryptocurrency exchanges-platforms that facilitate trading between traditional currency and digital coins-to identify unpaid taxes, including capital gains tax.
Officials estimate the measure could generate at least £300 million over the next five years, addressing widespread non-compliance among crypto traders.
"HMRC has long been concerned about high levels of tax avoidance in the crypto sector," said Dawn Register, a tax dispute resolution partner at BDO.
Dawn Register, BDO
Global framework aids tax enforcement
The new regulations, part of the Cryptoasset Reporting Framework (CARF), align the UK with dozens of other countries adopting similar measures to improve international cooperation on tax transparency.
Cryptocurrency exchanges must now provide accurate, up-to-date records of user earnings or face fines. The rules aim to close loopholes that previously allowed investors to conceal taxable gains.
Investors urged to act before deadline
Those who profited from cryptocurrency trades in the 2024-25 financial year may need to file a tax return by 31 January, using a new section in the self-assessment form.
HMRC is also encouraging voluntary disclosures for undeclared gains from previous years, offering a facility for taxpayers to correct past omissions before April 2024.
Regulators propose stricter industry rules
Meanwhile, the Financial Conduct Authority (FCA) is consulting on additional crypto regulations until 12 February, including standards for exchanges, broker responsibilities, and rules for crypto lending and borrowing.
"Our goal is to create a regime that protects consumers, supports innovation, and promotes trust," said David Geale, the FCA's executive director for payments and digital finance.
David Geale, FCA
Bitcoin's volatile year highlights tax challenges
Bitcoin, often seen as a benchmark for the broader crypto market, saw dramatic price swings in 2025, starting at around $93,500 (£69,500), peaking near $124,500, and ending below $90,000.
Investors who sold at higher prices now face potential tax liabilities, though authorities have historically struggled to track such transactions.
