HMRC will begin receiving cryptoasset platform data from 2027 under the OECD's CARF framework. Accountants must help clients prepare for mandatory third-party reporting with real enforcement penalties attached.
The UK has begun implementing the OECD's Crypto-Asset Reporting Framework (CARF), under which cryptoasset service providers including exchanges, custodians and similar platforms must collect and report customer information to tax authorities.
HMRC will start receiving this data from 2027. For practising accountants advising clients with cryptocurrency holdings, this marks a watershed moment—and brings urgent compliance implications.
What CARF Means for Your Clients
HMRC issued guidance on 14 May 2025 for UK-based reporting cryptoasset service providers, and from 1 January 2026, UK-based RCASPs have been required to collect and report detailed information on users and cryptoasset transactions to HMRC. Unlike passive oversight, this is mandatory third-party reporting.
The first reports are due by 31 May 2027 for the 2026 calendar year.
What does this mean in practice? UK-based RCASPs must collect data on all their users but only need to report on those who are tax resident in the UK or another CARF-participating country. HMRC then exchanges the relevant data with partner tax authorities. The reach is global: All EU countries, the Channel Islands, Brazil, the Cayman Islands, and South Africa will receive information under the system.
Enforcement: Real Teeth
The regime is not toothless. This new obligation comes with a real enforcement mechanism attached. Providers that fail to comply face penalties of up to £300 per user.
A per-user penalty scales directly with the size of a platform's customer base, which means the cost of onboarding, data collection, and reporting errors could be substantial for larger firms.
For your clients, the implication is stark: their crypto transactions are no longer flying under the radar. HMRC predicts the introduction of CARF will raise £350 million between 2026 and 2030. That revenue target reflects the tax authority's confidence that the data will drive compliance across the board.
Action Points for Accountants
Start conversations with clients now. CARF reporting will require robust customer identification and data-collection processes. This will overlap with existing KYC and AML infrastructure, even though CARF itself is a tax transparency rather than an AML measure. Firms that haven't yet mapped their CARF obligations against their existing client onboarding and data governance frameworks have a relatively short runway before the 2027 reporting deadline.
For your clients holding crypto:
- Audit holdings and transactions: They should reconcile their exchange accounts with their tax records now. Discrepancies will be difficult to explain once HMRC receives exchange data.
- Review tax position: If clients have claimed losses or failed to declare gains, the 2026 calendar year—the first year of CARF collection—is the moment to get the house in order through voluntary disclosure where appropriate.
- Distinguish exchange types: Not all platforms may be caught. Ensure clients understand which exchanges are UK-based RCASPs and hence subject to reporting.
- Plan for DeFi: HMRC published the outcome of a consultation on the tax treatment of individuals who invest in cryptoassets using DeFi lending and staking transactions. A final decision on whether or not to make legislative changes has not yet been made. Until guidance firms up, DeFi tax treatment remains ambiguous—and is a risk area.
Forward Look
CARF marks not just a compliance exercise but a fundamental shift in HMRC's visibility over crypto-assets. For accountants, this is a lever to encourage clients toward compliance and a reminder that the shadow economy around digital assets is fast collapsing into the light.