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Is there a crypto tax? (UK)

  • 4 min read
  • Last updated 16 Apr 2024

So, is there a crypto tax in the UK? 

Whilst cryptocurrency is a relatively new asset, the regulations surrounding it are still being formed. HMRC doesn’t consider cryptoassets to be a form of money, whether exchange tokens, utility tokens or security tokens. However, when it comes to taxing them, it depends on how the tokens are used. 

Bitcoin is an exchange token and, like many other exchange tokens, is used as a method of payment. So if you hold cryptoassets like Bitcoin as a personal investment, you will still be liable to pay Capital Gains Tax on any profit you make from them. 

Why is there a crypto tax (UK)?

At different points in the ten year history of cryptocurrency, Bitcoin has fluctuated significantly in value. Those who bought Bitcoin back in 2008 when it was worth fractions of a dollar could potentially have made hundreds of millions of dollars in profit in 2017 when its value peaked at almost $20,000, or in 2021 when it peaked at $67,000 🤯 

In the UK, you have to pay tax on profits over £3,000 (2024/25). And so irrespective of your view on the validity of cryptocurrency, you will always be liable to pay tax on your investment profits from them.

Do I have to be a crypto trader to be taxed?

There are various methods of acquiring cryptocurrency that might make you liable to be taxed:

  • Given to you by your employer as a form of non-cash payment
  • You’re a crypto miner 
  • Your business is back by cryptocurrency (i.e. you trade with crypto instead of fiat)
  • You trade crypto
    • If you trade volumes that amount to what HMRC considers as financial trade, you’ll also be liable to pay Income Tax, although these cases are few and far between

When you trade crypto, unlike some forms of forex trading, HMRC does not class it as gambling. As a result, you’re always liable to pay tax on your profits. 

tax on crypto 2024/25

What is the crypto tax (UK)?

If your crypto profits exceed the Capital Gains Tax allowance, you’ll have to pay crypto tax at the following rates:

Type of assetBasic rateHigher rate
Residential property18%24%

Be aware that these crypto tax rates are subject to change each year. Make sure that you stay abreast of any changes to CGT rates when you put money aside to do your tax return.

How do I pay crypto tax on my profits?

As with all tax you pay on profits, you’ll have to do a Self Assessment tax return to declare your income to HMRC and pay the correct amount of crypto tax.

If you’ve never done one before, don’t worry. The process isn’t too complicated if you know what you’re doing. Follow the below steps and you’ll be on the right path!

  1. Make sure you register for Self Assessment tax return by 5th October 
  2. Keep a good record of your crypto transactions, trading profits and expenses through the tax year
  3. Pay the tax you owe by 31st January
  4. Calculate the tax you owe as soon as you can to prepare for the bill

To help you along the way, take a look at our Capital Gains Tax calculator here.

Your situation

Outlined number oneImage of an arrow
How did you make money?
Profit from capital gains
Annual salary
Other income

Tax and profit

Outlined number two
  • Your profit from
    £3,000 tax-free CGT allowance
  • Capital Gains Tax to pay
  • Profit after tax

How your capital gains tax is calculated

The total capital gains tax (CGT) you owe depends on two things:

  • How much you earn in total
  • What type of assets you sell

Your overall earnings determine how much of your capital gains are taxed at – 10% or 20%.
Our capital gains tax rates guide explains this in more detail.

In your case where your capital gains from shares were £20,000 and your total annual earnings were £69,000:

Capital gains tax (CGT) breakdown

You pay no CGT on the first £3,000 that you make

You pay £127 at 10% tax rate for the next £1,270 of your capital gains

You pay £3,146 at 20% tax rate on the remaining £15,730 of your capital gains

Tax bill amount £3,273
I want to pay by
Savings frequency

You need to save

£4.91 per day

to pay your £3,273.00 tax bill by 31/1/2026 which is in 666 days

What do I need to send my crypto accountant (UK)?

At TaxScouts, our accredited accountants require a couple of things to get started on your Self Assessment tax return. A quick heads up – it’s not possible for our accountants to use a transaction summary to calculate the CGT you owe. This is because transaction summaries contain hundreds – sometimes thousands – of individual transactions!  Our accountants do need to see the proof of transactions to compare them with your totals, but they can’t take this alone. To make the whole tax return process quick and smooth, please send them:

  1. Your proof of transactions
  2. A CGT report from your broker or online trading platform in the form of a PDF or CSV file

So, yes, they need both. And if you’re curious or confused as to what a CGT report is, it’s simply a compressed version of your transaction history. We have a bunch of partners who are able to help you with this, and if you take a look at this guide, you’ll be able to read more about filing a crypto-specific tax return.

Filing a crypto tax return?

Well, listen up. We teamed up with Koinly to bring you a quick and easy solution: a tool to create crypto tax reports. Want to get your crypto tax report generated and tax return filed all in one? Look no further. Up to 1000 transactions totally free!

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