The Cryptoasset Reporting Framework (CARF) is the OECD's response to the regulatory blind spot created by crypto. It is designed to do for cryptoassets what the Common Reporting Standard already does for traditional financial accounts: oblige service providers to collect identifying information about their users, report transaction data to their home tax authority and exchange that information automatically across jurisdictions. The UK is one of the jurisdictions implementing CARF from 2026, and the practical consequences for UK crypto holders are significant.
What CARF requires
Under CARF, reporting cryptoasset service providers (RCASPs) are required to collect and verify information about their users (the "tax residence" and identifying details), report transactions in scope to their national tax authority, and have that information exchanged automatically with the user's country of tax residence. The transactions in scope include exchanges between cryptoassets and fiat, exchanges between different cryptoassets, and transfers of cryptoassets including certain retail payments.
UK implementation
HMRC's implementing rules require UK-based RCASPs to begin collecting due-diligence information from January 2026 and to make their first reports to HMRC for the 2026 calendar year, with reports submitted to HMRC the following year and exchanged internationally thereafter. The UK has aligned its implementation with the OECD timetable to ensure parity with EU member states implementing DAC8, which is the EU equivalent.
What this means for UK-resident users
The most immediate practical change is that any UK-resident user of any major exchange (UK-based or otherwise, given the international exchange of information) should assume that HMRC will receive data on their crypto activity directly from the service provider. The era of relying on the fact that crypto data is not visible to HMRC is closing. Specifically:
- Identification: Exchanges will need to verify your name, address, tax residence and tax identification number (your UTR or NINO).
- Transaction data: Aggregated values of disposals, acquisitions, transfers in and out, and certain retail transactions will be reported.
- Multi-jurisdiction matching: A UK resident using an exchange based in any reporting jurisdiction will see that data flow back to HMRC under the international exchange.
The compliance implication
Historically, HMRC has used "nudge letters" to prompt UK crypto holders to review their position, based on data acquired through information notices to UK exchanges. CARF replaces this ad hoc approach with a routine, comprehensive data feed. The expected outcome is a step change in HMRC's ability to identify undeclared crypto gains and a corresponding increase in enquiries and discovery assessments where returns do not match the data.
Practical steps for UK holders
- Reconcile your historic position. Run a full computation of all crypto activity from acquisition to date. Apply HMRC pooling rules. Identify any undisclosed gains in earlier years.
- Consider the Digital Disclosure Service. Where historic gains have not been reported, voluntary disclosure to HMRC carries materially lower penalties than disclosure prompted by an enquiry.
- Update your details with exchanges. Make sure your tax residence, UTR/NINO and contact details on every exchange you use are current. Mismatches will trigger enquiries.
- Maintain robust records. Exchange exports, wallet activity, on-chain receipts and disposal computations should be retained for at least six years.
What is and is not covered
CARF covers exchanges, crypto brokers, certain custodial wallet providers and some retail payment processors. It does not cover pure software wallets the holder uses for self-custody (since there is no service provider with the data), and it does not directly cover most pure DeFi activity at the protocol level. The OECD has acknowledged that the framework will evolve as DeFi matures.
The international dimension
For UK holders using non-UK exchanges based in CARF-participating jurisdictions (most major countries are signed up, including the EU, the US under separate domestic rules, Singapore and Japan), data on UK-resident activity will flow back via automatic exchange. Holders should not rely on the geography of an exchange to obscure activity from HMRC.
How PushDigits helps
We are working with UK crypto holders to prepare for CARF, including running back-book reconciliations, making voluntary disclosures where needed and putting in place ongoing record-keeping that will hold up against the new data feed. See our tax planning and Self Assessment pages, or book a consultation to discuss your CARF readiness.