HMRC plans to expose crypto tax evaders with new reporting rules

In the United Kingdom, a significant change is coming to the cryptocurrency landscape as HM Revenue and Customs (HMRC) prepares to implement new reporting requirements that will affect individuals holding cryptocurrencies such as Bitcoin, Ethereum, and Dogecoin starting in January 2026. These regulations mandate that all cryptocurrency owners provide personal details to each service provider they engage with. The objective of these stringent rules is to ensure that all individuals adhere to proper tax reporting practices concerning their cryptocurrency profits. This initiative is part of a broader strategy by HMRC to combat tax evasion, aiming to identify individuals who have failed to report their earnings from cryptocurrency transactions accurately. By centralizing the data collected from various service providers, HMRC intends to pinpoint tax dodgers and hold them accountable. Failure to comply with the new directives will result in penalties, including a fine of £300 for both individuals and service providers who do not fulfill their reporting obligations. Equipped with this new framework, HMRC will receive detailed reports that will include the cryptocurrency activities of users from January 2026 onwards. The enforcement of these reporting requirements serves as a backdrop for HMRC's ongoing efforts to ensure that all taxpayers meet their civic duty regarding taxation. This move is also aimed at increasing government revenue, which is essential for funding public services such as healthcare and law enforcement in the country. James Murray, the Exchequer Secretary to the Treasury, stated that these rules are designed to ensure equitable tax contributions from all individuals involved in cryptocurrency trading. Jonathan Athow, HMRC's director general for customer strategy and tax design, emphasized that these reporting requirements are not a new tax but rather a measure to ensure compliance with an existing law. The emphasis is on ensuring individuals understand their tax obligations when they profit from selling, swapping, or transferring cryptocurrency assets, as well as when receiving cryptocurrency through various work-related activities.