What Individuals and Businesses Need to Know
Cryptocurrency has moved from a niche investment to a mainstream financial asset. Whether you are trading Bitcoin, investing in Ethereum, or using digital assets for business transactions, it’s important to understand how HMRC taxes cryptocurrency.
Many taxpayers mistakenly believe crypto is anonymous or untaxed.
In reality, HMRC has clear rules — and increasing access to crypto transaction data.
Is Cryptocurrency Taxable in the UK?
Yes. HMRC treats cryptocurrency as an asset, not as money. This means that most crypto transactions are taxable events.
HMRC guidance applies to:
Failing to declare crypto activity can lead to penalties, interest, and investigations.
When Do You Pay Tax on Cryptocurrency? You may need to pay tax if you:
Each of these actions can trigger a Capital Gains Tax (CGT) or Income Tax liability.
Capital Gains Tax on Crypto Investments
Most individuals will pay Capital Gains Tax on profits made from cryptocurrency.
How CGT Works:
Losses can be carried forward and offset against future gains.
Income Tax on Cryptocurrency
Some crypto activities are treated as income, not capital gains.
Income Tax may apply if you receive crypto from:
In these cases, crypto is taxed at its GBP value on the date received and must be declared on a tax return.
Cryptocurrency for Businesses and Companies
If a business accepts or trades cryptocurrency:
Crypto accounting for companies is complex and often misunderstood, making professional advice essential.
Record Keeping for Crypto Transactions
HMRC requires detailed records, including:
Records must be kept for at least 5 years after the submission deadline.
Common Crypto Tax Mistakes
HMRC works with exchanges and uses advanced data-matching technology.How an Accountant Can Help With Crypto Tax
A specialist accountant can:
📞 Contact us today for expert cryptocurrency tax advice and ensure your digital assets are handled correctly.
01202 051 977
info@rockfast.uk