Cryptocurrency Taxes in the UK to Change in 2026
The UK government is taking a bold step to tighten cryptocurrency regulations. Starting in 2026, crypto service providers will be required to collect and report user data under the OECD’s Crypto Asset Reporting Framework (CARF) — a global initiative aimed at increasing tax transparency and curbing tax evasion.
The move brings the UK in line with over 40 countries, including all EU member states , and has huge implications for both centralized and decentralized cryptocurrency platforms.
What are CARF regulations and why did the UK adopt them?
The Crypto Asset Reporting Framework (CARF) was developed by the Organization for Economic Cooperation and Development (OECD) – an international body of 38 member countries – to address tax evasion in the digital asset sector.
By adopting CARF, the UK aims to:
Increasing transparency in cryptocurrency transactions
Complies with international tax standards
Preventing offshore tax evasion using digital assets
Important dates you must know
2026 : UK and overseas-based electronic money service providers (CASPs) must start collecting user and transaction identification data.
May 31, 2027: First deadline for filing annual reports.
Even if you are not based in the UK, if you serve UK users you still need to comply.
Which users are affected?
CASP must report:
All UK tax residents
Users from countries implementing CARF rules (expected over 40 jurisdictions)
They are required to collect data from all users, but reporting is limited to those residing in CARF-compliant countries.
The EU’s DAC8 rules will operate in parallel with CARF, requiring EU-focused crypto companies to also adhere to strict transparency measures.
What data needs to be collected?
Cryptocurrency companies will be required to collect:
User identification details
Transaction data (including volume, timestamps, and counterparties)
This applies to:
Exchange
Custodial wallet
Money transfer service provider
What happens if CASP is not compliant?
Non-compliance with CARF may result in:
Fines of up to €300 per user
Penalties for late, inaccurate or incomplete filing
CASPs are advised to start building reporting infrastructure now to avoid future penalties.
Impact on decentralized and non-custodial platforms
The new regulations are expected to challenge the business models of:
Decentralized Exchange (DEX)
Non-custodial wallet
These platforms place an emphasis on user privacy and flexibility, which may not be consistent with CARF requirements. The industry is closely monitoring further guidance from the UK government.
There have been rumours that some companies are considering leaving the UK due to high compliance costs.
Final thoughts
The UK’s adoption of CARF signals a new era of regulation in the crypto space. While the goal is greater security and transparency, it may come at the expense of privacy and decentralization — values that many in the crypto community hold dear. Crypto businesses must now adapt, prepare, or relocate as 2026 approaches.