The United Kingdom and 47 other countries began enforcing cryptocurrency tax reporting requirements on Jan. 1 under the Organization for Economic Cooperation and Development's Cryptoasset Reporting Framework, with major exchanges now required to collect and report user transaction data and tax residency information to authorities. The UK ranks among the first jurisdictions to implement the framework, which will require Her Majesty's Revenue and Customs to begin sharing data with participating countries starting in 2027.

The Financial Times reported the enforcement date marks the start of coordinated international monitoring of cryptocurrency transactions designed to combat tax evasion.

What Happened: Framework Implementation

A total of 75 countries have committed to CARF standards, with the United States scheduled to implement the framework in 2028 and begin data sharing in 2029. UK-based cryptocurrency exchanges must now report comprehensive user information including full legal names, addresses, dates of birth, and tax identification numbers to HMRC.

The regulations require documentation of each transaction's type, quantity, value, and nature for all UK taxpayers using cryptocurrency platforms.

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Why It Matters: Tax Collection

The framework adoption follows estimates by UK tax authorities that they have lost hundreds of millions of pounds in revenue from unreported digital asset gains.

Non-compliance carries fines up to £300 (approximately $400) per user affected by incomplete or inaccurate reporting, creating substantial potential liabilities for platforms with large UK customer bases.

The UK's implementation extends beyond baseline CARF requirements by mandating reporting on domestic holdings even when no foreign parties are involved in transactions.

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