UK Tax Agency Proposes Wider Access to Crypto Business Records
HM Revenue & Customs is seeking broader authority to request information from cryptoasset businesses as part of UK tax compliance efforts. The plan would extend Financial Institution Notice powers to crypto service providers and update rules on computer records, potentially covering software providers, wallet makers, block explorers, and data providers. Critics warn that linking personal details to public blockchain addresses could create long-lasting privacy and data-security risks.
HMRC wants broader authority over cryptoasset business records to help collect correct tax. Its plan would apply Financial Institution Notice powers to crypto service providers and revise computer-record access rules. The provider definition may extend beyond firms holding customer funds to tax software, wallet software, block explorers, data providers, and hardware wallet makers. The consultation ended Sept. 7, and ministers have not decided. Annual parliamentary reporting on these notices would be removed.
Concerns focus on linking names, addresses, and tax IDs to Bitcoin addresses. Because blockchain transactions are public, such links could expose wider on-chain history and raise breach, extortion, and safety risks.
UK crypto users, service providers, and tax authorities could be affected. Broader record access may help HMRC identify unreported gains and improve compliance. Yet linking identities to public blockchain addresses may create durable privacy risks, and concentrating such data could heighten breach, extortion, or safety concerns. Crypto businesses, including wallet and software firms, may face added compliance burdens, while taxpayers could gain clearer enforcement but also broader scrutiny.