A STEP-BY-STEP GUIDE TO REPORTING UK CRYPTO TAXES TO HMRC

Last updated: June 19, 2025, 19:18 | Written by: Arthur Hayes

Navigating the world of cryptocurrency taxes in the UK can feel like traversing a complex maze.With HMRC classifying crypto as property, not currency, understanding your tax obligations is crucial for staying compliant and avoiding potential penalties. To report your crypto tax to the HMRC, follow 5 steps: Calculate your crypto tax. You need to know your capital gains, losses, income, and expenses. Register to file taxes online with the Government Gateway service by the 5th of October 2025 if you re not already registered. Fill out the Self Assessment Tax Return (SA100).This comprehensive guide serves as your roadmap, providing a clear, step-by-step approach to reporting your crypto taxes to HMRC. Blockpit offers smart insights and suggestions to optimize your tax report, fix issues, add missing values and to validate your transactions. 3. Generate your tax report. Generate your compliant tax report with the click of a button. Our tax engine calculates your tax report on the basis of the UK tax framework.Whether you're a seasoned crypto trader or just starting your journey with digital assets, this article will equip you with the knowledge and tools you need to file your taxes accurately and efficiently. If you re interested in the specifics of how the HMRC taxes crypto activity, you can read our UK Crypto Tax Guide. How to calculate what crypto taxes you owe to the HMRC. The first step you ll need to take before reporting your crypto taxes to the HMRC is calculating your taxable obligations for: Crypto capital gains; Crypto capital lossesWe'll break down the complexities of Capital Gains Tax (CGT) and Income Tax as they apply to crypto, explore the intricacies of various crypto transactions, and guide you through the Self Assessment process. Declare losses to reduce your tax liabilities. 6. Reporting crypto taxes in the UK. When to report: The UK tax year runs from April 6 to April 5. File your Self-Assessment Tax Return by January 31 following the tax year. Investors must register by the 5th of October to file online if they haven t previously.Forget the confusion and uncertainty; let's simplify your crypto tax filing process and ensure you meet all your obligations to HMRC for each financial year starting on 6 April and ending on the following 5 April.

Step 1: Determining if You Need to Report Crypto to HMRC

The first crucial step is to determine whether your crypto activities trigger a reporting requirement to HMRC.Reporting your crypto activity to HMRC isn’t optional if you've engaged in certain transactions. See full list on koinly.ioAsk yourself: have you sold, traded, or spent cryptocurrency? This article provides a detailed step-by-step guide of how to calculate your cryptocurrency taxes in the UK and report them to the HMRC at for each financial year starting on 6 April and ending on the following 5 April.Have you earned income through mining, staking, or airdrops? Reporting your crypto activity to HMRC isn t optional, it s a legal requirement. If you ve earned income, made gains, or even just swapped one crypto asset for another, you may be liable to pay tax in the UK. HMRC classifies crypto as property, not currency.If the answer to any of these questions is yes, you likely need to report your crypto activities.

Specifically, you'll need to consider if your gains exceed the annual Capital Gains Tax allowance (currently £3,000 for the 2024/2025 tax year). This guide will help individuals understand the basic UK tax implications of some of the most common types of crypto transactions as outlined in the HMRC Cryptoassets Manual. How does HMRC classify crypto?Even if your gains are below this threshold, you may still need to report if your total proceeds from disposals (sales, trades, etc.) exceed four times the annual allowance, or £12,000.Furthermore, if you've earned income from crypto activities like mining or staking, this income is subject to Income Tax, regardless of the amount.

Key Considerations:

Did you sell, trade, or spend cryptocurrency?
Did you earn income through mining, staking, or airdrops?
Did your capital gains exceed the annual allowance?
Did your total proceeds from disposals exceed four times the annual allowance?

Step 2: Gathering the Necessary Information for Crypto Tax Reporting

Once you've determined that you need to report your crypto activities, the next step is to gather all the necessary information. In recent years, the HMRC has taken steps to curb crypto tax evasion. The HMRC has requested and obtained customer data from major exchanges and sent nudge letters to crypto investors to encourage them to pay capital gains and income tax. What happens if I don t report my crypto gains and losses in the UK? Under HMRC rules, taxpayersThis involves collecting detailed records of all your crypto transactions.Thorough record-keeping is essential for accurate tax reporting and for demonstrating compliance to HMRC.

Information to Collect:

Transaction History: This includes records of all your crypto transactions, such as purchases, sales, trades, and transfers. In the UK, you must pay Capital Gains Tax on crypto profits above the 3,000 annual allowance during the 2025/25 tax year when you sell, trade, or spend cryptocurrency. If you earn crypto through mining, staking, or airdrops, it is treated as income and taxed under Income Tax rules, with ratesMake sure to include the date of the transaction, the type of crypto asset involved, the amount of crypto transacted, and the value of the crypto in GBP (British Pounds) at the time of the transaction.
Exchange Statements: Download statements from all the cryptocurrency exchanges you've used.These statements typically provide a summary of your transaction history and can be invaluable for reconciling your records.
Wallet Addresses: Keep a record of all your crypto wallet addresses, including both public and private keys. In the United Kingdom, HMRC treats cryptocurrency as an asset, which means capital gains tax applies to profits from selling or disposing of cryptocurrency. Here s a comprehensive guide to calculating your cryptocurrency tax obligations in 2025 in the UK. Step-by-Step Guide for Calculating Crypto Tax in the UKThis information may be required for verification purposes.
Cost Basis Information: The cost basis is the original price you paid for a crypto asset, including any transaction fees. The UK government has published a summary of responses to the public consultation held earlier in 2025 on the implementation of the OECD s Cryptoasset Reporting Framework (CARF) and the updated Common Reporting Standard (CRS).This is crucial for calculating your capital gains or losses when you dispose of the asset.
Income Records: If you've earned crypto through mining, staking, or airdrops, collect records of the income received, including the date of receipt, the amount of crypto earned, and its value in GBP at the time.
Records of Crypto Used for Goods or Services: If you have used crypto to pay for any goods or services, make sure to record the date, the item purchased, and the value of the crypto in GBP at the time of transaction.

Remember, HMRC requires you to keep records for at least six years from the end of the tax year to which they relate.Maintaining organized and accurate records will not only simplify your tax reporting process but also protect you in case of an HMRC audit.

Step 3: Understanding How HMRC Taxes Cryptocurrency

Understanding how HMRC classifies and taxes cryptocurrency is fundamental to accurate reporting. Before you start. Check whether you ll need to report to HMRC. What you ll need to collect. You ll need to collect information about: all individual users; all entity users, which for CARFHMRC views crypto as property for tax purposes, not currency.This means that Capital Gains Tax (CGT) applies to profits made from selling, swapping, or otherwise disposing of cryptocurrency. Individuals may also be liable to pay Income Tax on income generated from cryptoasset-related activities, such as mining and staking rewards. Please see the guidance for further details. The tax treatment of cryptoassets can be a complex area, and you may wish to consider obtaining professional advice.Additionally, Income Tax applies to crypto earned through activities like mining, staking, or airdrops.

Capital Gains Tax (CGT)

CGT is levied on the profit (or ""gain"") you make when you sell or dispose of an asset. Starting Janu, HMRC will begin enforcing stricter crypto tax rules in the UK. The changes will require crypto platforms to share personal and transaction data directly with HMRC. Investors and traders will face tighter reporting duties, reduced tax-free allowances, and new ways their activities are tracked.When you sell, trade, or use cryptocurrency to purchase goods or services, you are disposing of an asset, and any profit you make is subject to CGT.The amount of CGT you pay depends on your income tax bracket.

Calculating Capital Gains:

To calculate your capital gain, subtract your cost basis (the original purchase price) from the proceeds you receive from the disposal.Remember to include any transaction fees in your cost basis. Learn how to report your crypto taxes to HMRC with our step-by-step guide. Stay compliant, avoid penalties and simplify your crypto tax filing process.This calculation needs to be performed for each disposal event.Complex rules apply for matching disposals to acquisitions, particularly the 'bed and breakfasting' rules which prevent you from simply selecting the acquisition which minimises the gain.

Example:

Suppose you bought 1 Bitcoin for £10,000 and later sold it for £15,000. The filing deadline for online submissions for self-assessment tax returns in the UK is January 31st. Capital Gains Tax (CGT) applies to taxable gains from selling, swapping, or using crypto forYour capital gain would be £5,000 (£15,000 - £10,000). Don t worry we have the answer. You should start here with this ultimate UK crypto tax guide. We have curated the most comprehensive crypto tax guide for UK residents, covering all aspects of crypto taxation including capital gains tax UK, income tax UK, and NFT taxes, in a very digestible manner. So let s get startedYou would then need to deduct your annual CGT allowance (if applicable) to arrive at the taxable gain.

Income Tax

Income Tax applies to crypto earned through activities such as mining, staking, and airdrops.The value of the crypto at the time you receive it is considered income and is taxed at your usual Income Tax rate. UK crypto transactions trades, disposals, and earnings are taxed under HMRC s Capital Gains or Income Tax rules, with gains and losses calculated using pooling, matching and annual allowances. Special cases such as DeFi positions, NFTs, hard forks, airdrops and negligible-value claims for lost or stolen assets each have distinct tax treatments.You'll need to convert the crypto's value to GBP at the time of receipt to accurately report it.

Example:

If you earned £2,000 worth of Ethereum through staking, this £2,000 would be treated as income and taxed according to your income tax bracket.

Specific Transaction Types

Certain crypto transactions require special attention.For example, transactions involving DeFi (Decentralized Finance) positions, NFTs (Non-Fungible Tokens), hard forks, and airdrops may have unique tax implications. Learn how to report crypto taxes to HMRC with this guide. Understand various tax types in crypto and follow proven steps for filing your crypto tax return.If you've engaged in these types of transactions, it's advisable to seek professional tax advice to ensure you're reporting them correctly.

Step 4: Registering for Self Assessment with HMRC

To report your crypto taxes to HMRC, you'll likely need to register for Self Assessment. We've teamed up with crypto tax calculator Koinly to answer your UK crypto tax questions. Please note, that while this article includes information regarding crypto tax guidance from HMRC, it is not tax advice. Always seek guidance from a licensed tax professional for advice relating to your financial situation.Self Assessment is the system HMRC uses to collect Income Tax from people who don't have tax automatically deducted from their income.

Who Needs to Register?

If you're already registered for Self Assessment, you don't need to register again.However, if you're new to Self Assessment and need to report crypto gains or income, you'll need to register.If you have never filed taxes before, you must register by the 5th of October following the end of the tax year you are reporting for.

How to Register:

You can register for Self Assessment online through the Government Gateway. This guide explains everything you need to know about reporting your crypto to HMRC, step-by-step. From registration to completing forms SA100 and SA108, we ll walk you through the entire Self Assessment process so you can stay compliant and avoid penalties.You'll need to provide your National Insurance number and other personal details.Once you've registered, you'll receive a Unique Taxpayer Reference (UTR), which you'll need to file your tax return.

Important Dates:

Step 5: Filing Your Crypto Tax Return (SA100 and SA108 Forms)

Once you're registered for Self Assessment and have gathered all the necessary information, you're ready to file your crypto tax return. Step-by-step guide to filing crypto taxes; Step 1 - Check if you need to file a tax return for your crypto; Step 2 - Registering for self-assessment; Step 3 - Filing and paying your crypto tax return ; Common crypto tax filing mistakes to avoid; Simplify crypto tax filing with Recap's tax calculator!This involves completing the Self Assessment Tax Return (SA100) and the Capital Gains Summary (SA108) forms.

Completing the SA100 Form

The SA100 form is the main Self Assessment Tax Return form. Key steps include understanding how HMRC taxes crypto, filing correctly, avoiding common errors, and keeping thorough transaction records. This UK cryptocurrency tax guide provides general insights to help users meet these requirements.You'll need to complete this form to declare all your income, including any income earned from crypto activities like mining or staking.You'll also need to declare any other income you've received, such as employment income or rental income.

Completing the SA108 Form

The SA108 form is the Capital Gains Summary form.You'll need to complete this form to declare any capital gains you've made from disposing of crypto assets.This includes gains from selling, trading, or using crypto to purchase goods or services.For each disposal, you'll need to provide details such as the date of the transaction, the type of crypto asset, the amount of crypto disposed of, the proceeds received, and your cost basis.

Filing Online

The easiest way to file your tax return is online through the Government Gateway.You'll need your UTR and Government Gateway password to log in.Once you've logged in, you can complete the SA100 and SA108 forms online and submit them electronically.

Deadlines

The deadline for filing your Self Assessment Tax Return online is 31 January following the end of the tax year.Make sure you file your return on time to avoid penalties.

Online filing deadline: 31 January

Step 6: Paying Your Crypto Tax Bill

After you've filed your tax return, HMRC will calculate your tax bill.You'll need to pay your tax bill by the deadline to avoid penalties and interest charges.

Payment Methods:

You can pay your tax bill online through the Government Gateway using a debit card, credit card, or bank transfer.You can also pay by direct debit, cheque, or at your bank or building society.Online payment is the easiest and fastest method.Make sure to allocate time for the payment to process prior to the deadline.

Payment Deadline:

The payment deadline is the same as the filing deadline: 31 January following the end of the tax year.Set a reminder to make your payment on time.

Potential Penalties

HMRC enforces penalties for late filing and late payment.Interest is also charged on late payments.Don't risk fines and additional expenses, if you are concerned about being late filing, speak to a professional to arrange an extension.

Common Crypto Tax Filing Mistakes to Avoid

Filing crypto taxes can be complex, and it's easy to make mistakes.Here are some common errors to avoid:

Failing to Report: As previously discussed, perhaps the most common mistake is simply not reporting crypto activity, assuming it's too small or insignificant.HMRC is increasingly scrutinizing crypto transactions, so it's crucial to report all taxable activity.
Inaccurate Record-Keeping: Poor or incomplete records can lead to inaccurate tax calculations and potential penalties.Maintain detailed records of all transactions, including dates, amounts, and values in GBP.
Incorrectly Calculating Capital Gains: Incorrectly calculating the capital gain by forgetting to account for the annual allowance, transaction fees or miscalculating pool values.
Misclassifying Crypto Income: Failing to recognize income from activities like mining, staking, or airdrops, and thus not reporting it as Income Tax.
Ignoring Airdrops and Hard Forks: These events can have tax implications, and it's important to understand how to report them correctly.Often, airdrops are seen as income if received in exchange for a service.
Not Seeking Professional Advice: If you're unsure about any aspect of crypto tax reporting, don't hesitate to seek professional advice from a qualified tax advisor.The tax treatment of cryptoassets can be complex, and a professional can help you navigate the intricacies and ensure you're complying with all applicable rules.

Utilizing Crypto Tax Software and Calculators

Calculating and reporting crypto taxes can be simplified by using crypto tax software and calculators.These tools can help you track your transactions, calculate your capital gains and losses, and generate tax reports that are compatible with HMRC requirements.

Benefits of Using Crypto Tax Software:

Automation: Crypto tax software automates many of the manual tasks involved in calculating your taxes.
Accuracy: These tools are designed to ensure accuracy and compliance with HMRC rules.
Time-Saving: Crypto tax software can save you significant time and effort compared to manually tracking and calculating your taxes.
Report Generation: The best software can generate compliant tax reports that you can submit directly to HMRC.

Popular crypto tax software options include Koinly and Recap.These platforms can help you import your transaction data, calculate your taxes, and generate the necessary reports for filing with HMRC.Blockpit also offers smart insights and suggestions to optimize your tax report, fix issues, add missing values, and validate your transactions.

HMRC's Increased Scrutiny of Crypto Assets

In recent years, HMRC has significantly increased its scrutiny of crypto assets.They have requested and obtained customer data from major exchanges and sent ""nudge letters"" to crypto investors to encourage them to pay Capital Gains and Income Tax.HMRC has also implemented stricter crypto tax rules, requiring crypto platforms to share personal and transaction data directly with HMRC.These measures indicate HMRC's commitment to cracking down on crypto tax evasion.

The introduction of the OECD’s Cryptoasset Reporting Framework (CARF) and the updated Common Reporting Standard (CRS) will further enhance HMRC's ability to track and monitor crypto transactions.Investors and traders will face tighter reporting duties, reduced tax-free allowances, and new ways their activities are tracked.These changes underscore the importance of accurate and compliant crypto tax reporting.

Seeking Professional Tax Advice

Navigating the complexities of crypto tax can be challenging, and it's often advisable to seek professional tax advice.A qualified tax advisor can provide personalized guidance based on your specific circumstances and ensure that you're complying with all applicable rules and regulations.

When to Seek Professional Advice:

If you've engaged in complex crypto transactions, such as DeFi positions, NFTs, or hard forks.
If you're unsure about how to report certain types of crypto income or gains.
If you're facing an HMRC inquiry or audit.
If you simply want peace of mind knowing that you're complying with all applicable tax laws.

Staying Updated on Crypto Tax Regulations

Crypto tax regulations are constantly evolving, so it's essential to stay updated on the latest changes.HMRC regularly publishes guidance on crypto tax, and it's important to review these updates to ensure you're complying with the most current rules.

How to Stay Informed:

Subscribe to HMRC updates and announcements.
Follow reputable crypto tax news sources.
Attend crypto tax webinars and conferences.
Consult with a qualified tax advisor.

Conclusion: Navigating UK Crypto Taxes with Confidence

Reporting your UK crypto taxes to HMRC might seem daunting, but by following this step-by-step guide, you can navigate the process with confidence.Remember to determine if you need to report, gather all the necessary information, understand how HMRC taxes crypto, register for Self Assessment, file your tax return accurately, pay your tax bill on time, and avoid common filing mistakes.Utilize crypto tax software and calculators to simplify the process, and don't hesitate to seek professional advice if needed.With careful planning and diligent record-keeping, you can ensure that you're complying with all applicable tax laws and avoiding potential penalties.Stay informed about the latest regulations and seek professional guidance to navigate any complexities.Armed with this knowledge, you can approach your crypto tax obligations with clarity and assurance.Start gathering your records today and ensure you meet the January 31st deadline for online submissions.Remember, accurate reporting is key to maintaining compliance and peace of mind in the ever-evolving world of crypto taxation.