UK Budget 2026 Expands HMRC Crypto Enforcement Powers

The UK Autumn Budget 2026 introduces major updates to civil tax enforcement and reporting duties that directly impact UK taxpayers and corporate entities holding digital assets. According to official publication details by legal tax experts at Skadden, Arps, Slate, Meagher & Flom LLP, HM Revenue and Customs (HMRC) is set to receive expanded information-gathering powers while placing a statutory correction duty on taxpayers.

Expanded Information Powers for Digital Assets

Under the statutory updates outlined in the Budget, HMRC civil information and inspection powers will be extended to allow the tax authority to issue Financial Institution Notices (FINs) specifically regarding cryptoassets and associated payment transfers. In addition, existing statutory obligations requiring HMRC to report annually on its FIN usage will be removed. The tax authority will also gain enhanced statutory access to information held in digital systems, permitting data requests in a broader range of electronic formats while maintaining standard checks to confirm that information requested is reasonably required.

Mandatory Statutory Duty to Correct Errors

Beginning 1 April 2028, taxpayers will face a statutory duty under a new Schedule 24A to the Finance Act 2007 to correct returns once an inaccuracy becomes known. Taxpayers who fail to take reasonable steps to notify HMRC or amend documentation will see previously careless or innocent inaccuracies treated as deliberate. This designation carries higher penalties and extends HMRC assessment powers to a 20-year window.

Furthermore, HMRC will gain authority to issue Customer Correction Notices (CCNs) where inaccuracies are suspected. Failure to respond or clarify position within specified deadlines creates a legal presumption of careless conduct.

Corporate Interest Restrictions and AVEC/VGEC Adjustments

For corporate groups operating in technology and creative sectors, the Budget adjusts corporate interest restriction (CIR) legislation from 1 January 2027. Audio-Visual Expenditure Credits (AVEC) and Video Games Expenditure Credits (VGEC) will be excluded from tax-EBITDA calculations to prevent excess interest deductions, streamlining corporate tax administration.

Information contained in this article is for educational and news reporting purposes only and does not constitute financial or legal advice.

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