CARF provides for the automatic exchange of cryptoasset on an annual basis. It was developed by the Organisation for Economic Cooperation and Development (OECD) to make transactions in cryptoassets more transparent for tax purposes. The UK Government confirmed during the At Autumn Budgetin 2024 that it would implement CARF from 1 January 2026.
On 24 June 2025, regulations were made requiring reporting cryptoasset service providers (RCASPs) to collect and report information on cryptoasset users who are resident in the UK or in another jurisdiction that is signed up to CARF. The first report, which will cover the period from 1 January 2026 to 31 December 2026, must be submitted to HMRC by 31 May 2027. As explained previously by ICAEW, HMRC recently published guidance to help RCASPs and cryptoasset users prepare for the changes.
In a tax information and impact note (TIIN) published alongside the regulations, HMRC states that CARF is intended to have a “deterrent effect on individuals who hold cryptoassets” and will “encourage correct tax reporting of the income and gains” on cryptoassets. The self assessment tax return for 2024/25 includes new boxes for reporting capital gains and losses on cryptoassets separately from other assets (boxes 13.1 to 13.8 on the capital gains tax supplementary pages). Going forward, this will enable HMRC to reconcile taxpayers’ records with information received under CARF and to identify any inconsistencies.
As a result of these measures, HMRC estimates that CARF will increase tax revenues by £315m over the four years leading up to and including 2029/30. The TIIN also sets out the estimated costs of CARF for businesses and HMRC. HMRC has identified 50 RCASPs and estimates that they will incur additional costs of £800,000 per year as a result of CARF. Implementing CARF is expected to cost HMRC £69m, which includes IT delivery and support costs.
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