Get crypto tax reporting right
Staying compliant with HMRC might sound like a headache, but it doesn’t have to be. If you’ve traded, earned, spent, or even just held onto crypto in the UK, this guide breaks down exactly how to report it without getting overwhelmed.
Step 1: Figure Out If You Even Owe Tax
Not everyone who dabbles in crypto owes tax — but many do without realising it. You’ll likely need to report Capital Gains Tax (CGT) or Income Tax depending on what you did:
- Capital Gains Tax: If you sold, traded, or spent your crypto for more than you paid.
- Income Tax: If you earned crypto (from staking, mining, airdrops, or payments).
You don’t pay tax just for holding crypto — but you do need to keep records of when and how you acquired it.
Step 2: Calculate Your Gains or Income
To report correctly, you need to calculate your crypto gains and income for the tax year (6 April to 5 April).
Use your transaction history from exchanges, wallets, and DeFi platforms. Include:
- Buy and sell dates
- Amounts and values in GBP
- Fees paid
- Wallet addresses (if needed for audit trail)
You can use spreadsheets, but many opt for crypto tax tools like Koinly or Accointing to save time (and hassle).
Step 3: Register for Self Assessment
If you’ve never filed a tax return before, register for HMRC’s Self Assessment service. You’ll need to do this by 5 October following the end of the tax year.
For example, for the 2023–24 tax year (ending 5 April 2024), register by 5 October 2024.
Already registered? Then you’re good to go.
Step 4: Fill in the Tax Return (SA100)
Log into your HMRC account and complete the SA100 form online. Report:
- Capital Gains under the Capital Gains section (include total gains, losses, and net gain)
- Crypto income (e.g. staking rewards or airdrops) under “Other Income”
Remember to include losses even if you don’t owe tax this year — they can reduce future tax bills.
Step 5: Submit & Pay
The deadline to file online is 31 January after the end of the tax year.
So for the 2023–24 tax year, the deadline is 31 January 2025. You must also pay any tax owed by that date.
Common Crypto Tax Misconceptions in the UK
Let’s bust a few myths we still hear way too often:
“I don’t owe tax if I didn’t convert to GBP”
Wrong. Trading one crypto for another (like ETH to SOL) is taxable in the UK.
“DeFi and NFTs aren’t trackable”
They are. HMRC doesn’t care where your crypto sits. If it made you money, it could be taxable.
“Crypto losses don’t matter”
Actually, they do. You can report losses and carry them forward to offset future gains.
“Airdrops are always tax-free”
Nope. If you receive an airdrop in return for a service or action, it’s considered income.
Example: HMRC Crypto Tax in Action
Let’s say James:
- Bought 1 ETH for £1,000
- Sold it a year later for £1,800
- Earned £200 in staking rewards over the year
Here’s how it breaks down:
- Capital Gain = £800 (taxable if total gains exceed your annual CGT allowance)
- Staking Rewards = £200 income (potentially taxable if total income exceeds allowances)
James would report the £800 under Capital Gains and £200 under Other Income on his Self Assessment.
Crypto Tax FAQ
What happens if I don’t report crypto to HMRC?
HMRC is actively cracking down. If they find undeclared crypto activity, expect backdated tax, fines, and interest.
How far back can HMRC go?
Up to 20 years if they suspect deliberate tax evasion — usually 4–6 years for honest mistakes.
Can I deduct crypto losses from my income?
No — but you can offset them against other crypto gains. Be sure to report them, even if you’re not making gains this year.
Final Thoughts
Filing crypto taxes in the UK isn’t as scary as it seems — and getting it right could save you headaches (and money) later on. The key is tracking your activity early, keeping records, and using HMRC’s system confidently.
If you’re not sure where to start, check out our recommended tools or speak to a UK crypto tax advisor.