Cryptocurrency holders are facing significant changes following recent announcements in Budget 2025 that emphasize increased regulation and tax transparency concerning digital assets. The government has confirmed that HM Revenue & Customs (HMRC) will soon begin receiving comprehensive financial information directly from cryptocurrency exchanges, marking a pivotal shift in how cryptocurrency trading is monitored for tax purposes.
Starting January 1, 2026, major cryptocurrency platforms will be mandated to collect and maintain detailed transaction records for their UK customers. This data will include critical financial information such as purchase amounts, sale prices, and any profits generated from these transactions. This initiative is part of a broader effort to clamp down on tax avoidance within the growing digital asset landscape.
By 2027, these platforms will begin transmitting this information directly to HMRC, giving the tax authority an unprecedented level of visibility into individuals’ cryptocurrency gains. Experts have cautioned that this development underscores the importance for cryptocurrency traders—from major tokens like Bitcoin and Ethereum to smaller altcoins—to meticulously report their earnings on self-assessment tax returns. According to tax insurance provider Qdos’s CEO, Seb Maley, HMRC will soon possess a detailed picture of who is profiting from cryptocurrency trading and by how much.
Maley stated, “Anyone who holds or trades cryptocurrency must ensure they are reporting the gains on their self-assessment tax return. HMRC is set to have more information and data at its fingertips than ever before.” The forthcoming regulations will allow HMRC to cross-check tax returns against the data received from crypto platforms, potentially leading to stricter enforcement against undeclared profits.
Moreover, these measures align with the UK’s commitment to the global Crypto-Asset Reporting Framework (CARF), which aims to enhance transparency within the rapidly expanding digital asset market.
In addition to the crypto-related announcements, the Budget document detailed plans to adjust the economic crime levy by splitting the previous ‘large’ band into two separate categories based on revenue. The new bands will differentiate businesses generating between £36 million and £500 million in revenue from those making between £500 million and £1 billion. The charge for all bands will be set at 0.1 percent of revenue, with specific thresholds established for each band.
Furthermore, the government has pledged over £1.5 billion across the upcoming spending review period to support initiatives such as the Youth Guarantee and the Growth and Skills Levy, aimed at addressing the high levels of youth disengagement from education or employment. The Youth Guarantee will ensure that all individuals aged 16 to 24 have access to the necessary resources to either earn or pursue further education.
Overall, these new regulations and initiatives signal a proactive approach by the UK government to modernize its tax framework and support economic growth, while ensuring greater accountability in the burgeoning cryptocurrency market.
