HMRC has proposed wider powers to get tax information from UK cryptoasset service providers and to inspect digital records. HMRC published the draft legislation on 13 July 2026, and the consultation closed on 7 September. Separately, crypto businesses already have reporting duties under the Cryptoasset Reporting Framework (CARF). Their first reports are due by 31 May 2027.
HMRC Moves to Expand Crypto Tax Investigation Powers
UK crypto businesses face growing tax scrutiny. HMRC wants broader access to financial and digital records. On 13 July 2026, HMRC published draft legislation to strengthen its information and inspection powers. The proposals cover cryptoasset service providers. They also update the rules for accessing digital information.
The consultation closed on 7 September 2026. But these powers are only proposals. Don’t treat them as law yet. If you run a crypto exchange, brokerage or software business, the proposals raise real questions about recordkeeping and future HMRC tax investigations.
What New Crypto Tax Powers Is HMRC Proposing?
The biggest proposal would extend Financial Institution Notices (FINs) to cryptoasset service providers.
A FIN lets HMRC ask for information for tax checks without prior tribunal approval. Legal safeguards still apply. If the extension passes, HMRC could request relevant information directly from crypto service providers.
The draft also updates the rules on digital records and help with inspections. People who create, develop or produce relevant systems could have to help HMRC access information, within the limits of the law. These measures do not give HMRC unlimited access to private wallets or digital systems.
Which UK Crypto Businesses Could Be Affected?
The proposed changes may affect several groups:
- Crypto exchanges, brokers and custodians
- Software developers and digital platform providers
- Businesses that offer cryptoasset-related services
- Companies and investors whose transactions face HMRC tax checks
Your exact duties will depend on what your business does and on the final law. Review your systems now to see which rules may apply, and make sure your wider AML compliance controls are up to date.
What Are the CARF Reporting Rules for 2026?
The new investigation powers are only proposals. But separate crypto reporting rules are already in force. The UK’s Cryptoasset Reporting Framework (CARF) took effect on 1 January 2026. Reporting cryptoasset service providers must collect customer information and relevant transaction details.
The first reporting deadline is 31 May 2027. It covers transactions from 1 January to 31 December 2026.
Under HMRC guidance, you may face penalties of up to £300 per user if you:
- Fail to report
- Submit late
- Give inaccurate information
Missing these rules can create real financial and compliance risks.
Is HMRC Proposing Tax Relief for DeFi Transactions?
Yes, in a limited way. Alongside the tougher scrutiny, HMRC has proposed changes for certain crypto loans and liquidity pools.
Under the proposed No Gain, No Loss treatment, Capital Gains Tax on qualifying transactions would wait until an economic disposal happens. The intended start date is 6 April 2027.
These proposed rules mainly cover individuals and trustees. They don’t give automatic tax relief to all crypto businesses.
What Should UK Crypto Businesses Do Now?
Prepare for the duties you already have. Keep an eye on the proposed law at the same time. Take these steps:
- Check whether CARF reporting rules apply to you.
- Review your customer identification and transaction records, supported by consistent bookkeeping.
- Confirm your records support accurate tax reporting.
- Review past crypto gains and related tax filings with a specialist crypto accountant.
- Follow HMRC updates before the proposed powers become law.
Early preparation helps you find gaps before reporting deadlines arrive.
How Can Lanop Help with Crypto Tax Compliance?
At Lanop Business & Tax Advisors, we help businesses understand UK tax duties and manage compliance. Our tax advisory team can help you review tax records, understand reporting duties and prepare for HMRC matters as part of wider tax planning.
HMRC’s approach to crypto tax is still developing. Clear records and timely advice matter more than ever. Contact Lanop today to discuss your crypto tax position and prepare for upcoming reporting rules.
