If you traded crypto in 2026, HMRC will soon be able to check your return against your exchange’s records. That is the plain effect of the UK’s Cryptoasset Reporting Framework, known as CARF. UK crypto exchanges have collected user and transaction data since 1 January 2026. Their first reports to HMRC fall due between 1 January and 31 May 2027. Your 2025/26 Self Assessment return, due by 31 January 2027, is the first filed while that data collection runs in the background.
This is not a new tax. It is a new way for HMRC to see information that was already reportable. The right response is not panic. It is a clean return, filed on time, with records that match what your exchange holds.
What CARF is, in plain terms
CARF is an international reporting framework for cryptoassets. In the UK, it applies to reporting cryptoasset service providers. Those are exchanges, brokers, dealers, and custodial wallet providers that serve UK users.
From 1 January 2026, those providers must collect user and transaction data. GOV.UK’s guidance, Reporting cryptoasset user and transaction data, confirms the first report window: between 1 January 2027 and 31 May 2027, covering 1 January 2026 to 31 December 2026. Later reports fall due by 31 May each year.
Providers must also register with HMRC. Under the regulations, registration falls due by 31 January 2027, the same day your 2025/26 online return is due. That shared date is no coincidence. It is the point where exchange reporting and Self Assessment meet.
Providers that fail to report, report late, or report inaccurately face a penalty of up to £300 per user, under the GOV.UK guidance. That penalty falls on the provider, not on you. But it gives providers a strong reason to report fully and on time.
Why your 2025/26 return is the one that matters
The 2025/26 return carries dedicated crypto boxes, numbered 13.1 to 13.8 on the Capital Gains pages. Those boxes let HMRC reconcile what you declare against what exchanges report. In earlier years, crypto gains sat inside general capital gains figures. Now they have their own boxes, and exchange data sits behind them.
Think of it this way. HMRC will be able to see it. That is the right framing. It does not mean HMRC will catch you. It means a mismatch between your return and exchange data is now much easier for HMRC to spot.
The return itself covers the tax year from 6 April 2025 to 5 April 2026. But the CARF collection year is calendar 2026. The two years overlap only in part. That overlap is why timing matters. Trades in early 2026 fall inside the first CARF report, even though they belong to the 2026/27 tax year for Self Assessment. Keep records by calendar year as well as by tax year, so both views reconcile.
What counts as a disposal
A disposal is not only a sale for pounds. For Capital Gains Tax, you dispose of crypto when you sell it for fiat currency, swap it for another cryptoasset, spend it on goods or services, or give it away to someone other than your spouse or civil partner. Each disposal can create a gain or a loss.
You only pay Capital Gains Tax when your total gains for the tax year, after losses and reliefs, sit above the annual exempt amount. GOV.UK’s Capital Gains Tax rates and allowances page confirms the annual exempt amount for individuals is £3,000 for 2025/26. That is the same figure as for 2024/25 and 2026/27.
Two common traps follow from that. First, the £3,000 limit applies to gains, not to total sales. Selling £50,000 of crypto is not the same as gaining £50,000. Second, if your total disposal proceeds for the year exceed £50,000, you must report the disposals even if your gains sit below £3,000. Check the proceeds test before you decide you have nothing to report.
Staking rewards and similar income are a different matter. They are usually taxed as income, not as capital gains. Keep income and gains in separate records. Mixing them is the fastest way to file a wrong return.
What to do before 31 January 2027
Start with your exchanges. Download full transaction histories from every exchange and wallet you used. Do not rely on a single year-end summary. You need dates, amounts, and fiat values for each disposal.
Then work out gains and losses for 2025/26. Use consistent valuation. Apply losses from the same year first. Keep a note of losses carried forward. If you used more than one exchange, combine the figures before you apply the £3,000 exempt amount. The exempt amount covers all your disposals for the year, not one per exchange.
Then check the crypto boxes, 13.1 to 13.8, against your workings. If a figure in a box does not match your records, stop and find why. A small mismatch now is cheaper to fix than an HMRC enquiry later.
If you find gaps from earlier years, correcting them voluntarily beats waiting. HMRC runs a disclosure route for crypto, and unprompted correction normally leads to lower penalties than a discovery by HMRC. Take professional advice first if the amounts are large or the gaps span several years. The point stands either way: a clean correction now is better than a mismatch later.
For wider deadline planning, read November 2026 tax deadlines. If you missed the registration deadline for this return, read Missed the 5 October Self Assessment registration deadline. For how side income is taxed more broadly, read Side hustle tax rules.
What CARF does not change
CARF does not change what is taxable. It does not create a tax on holding crypto. It does not tax unrealised gains. It does not give HMRC your private keys. It gives HMRC the same kind of summary data that banks have reported for years under similar exchange regimes.
It also does not replace your return. Exchange data is a check, not a filing. You still file. You still work out your own gains. And if exchange data is wrong, your records are your defence. Keep them for at least the period HMRC can enquire into your return.
Frequently asked questions
Does HMRC already know about my crypto trades?
From 1 January 2026, UK reporting providers have collected user and transaction data under CARF. Their first reports fall due between 1 January and 31 May 2027. HMRC will be able to compare those reports against your return.
Is CARF a new crypto tax?
No. CARF is a reporting regime, not a tax. Capital Gains Tax on crypto disposals and Income Tax on crypto income already applied. CARF makes the reporting behind them visible to HMRC.
What is the Capital Gains Tax annual exempt amount for 2025/26?
It is £3,000 for individuals, confirmed on GOV.UK. You only pay Capital Gains Tax on total gains above that amount, after losses and reliefs. You must still report disposals if total proceeds exceed £50,000, even if gains are below £3,000.
Do I need to report crypto if I only swapped one coin for another?
Yes, if the swap is a disposal for Capital Gains Tax. Swapping crypto for crypto, spending crypto, and giving crypto away (other than to a spouse or civil partner) can all be disposals. Only a transfer between your own wallets, with no change of ownership, is not a disposal.
What if my exchange is based outside the UK?
CARF is international. Providers in other CARF countries report their UK users, and tax authorities exchange the data. A non-UK exchange does not remove your UK reporting duty.
What should I do if I find an old unreported gain?
Do not wait for a mismatch to surface. Take advice, then correct the position voluntarily. Unprompted correction normally leads to lower penalties than a discovery by HMRC.
Disclaimer
This guide provides general information about cryptoasset tax reporting under CARF as of October 2026. Tax rules and government announcements can change. Nothing in this article is tax advice. Always consult with a qualified tax professional about your specific circumstances. That’s what we’re here for. In accordance with our normal practice we give this reference in good faith and in confidence, without legal liability on the part of the author or the company. The author assumes no responsibility or liability for any errors or omissions in the content of this site
The information provided in this blog is for general guidance and educational purposes only and does not constitute financial, tax, accounting or legal advice. iFiler, registered in England under Company Registration Number 15996173, has prepared this content to offer general insights into financial and taxation matters. Although we make every effort to ensure the accuracy and relevance of the information at the time of publication, we give no guarantee regarding completeness, accuracy or suitability for your specific circumstances.
Readers should not act, or refrain from acting, based solely on the information contained in this content. Always get professional advice tailored to your personal or business situation before making any financial or tax-related decision. iFiler accepts no liability for any loss or damage arising from reliance on the information in this blog.
