The UK is implementing new tax reporting rules for crypto traders aimed at closing loopholes by January 2026.
Objectives of the New Initiative
HM Treasury and HM Revenue & Customs have announced a new initiative aimed at preventing tax evasion and sustaining funding for public services. Exchequer Secretary James Murray emphasized that these measures will enhance tax compliance.
Details of the Tax Rules
The new rules apply to all crypto holders and service providers, requiring the submission of personal tax reference numbers. Jonathan Athow from HMRC clarified that the new requirements are not a new tax but will assist in existing compliance efforts. Penalties for non-compliance will reach £300 per offense starting in 2026.
Expected Market Implications
The changes are expected to increase tax revenues by £315 million by April 2030. The scope covers main cryptocurrencies such as Bitcoin and Ethereum, as well as NFTs and DeFi platform assets. The intensifying regulation could impact trading volumes and DeFi engagement in the UK.
The UK’s tax compliance initiative represents a step towards greater transparency in the crypto industry and a reduction in tax evasion. It is expected to lead to stricter regulation and adaptation within the crypto market.