What tax do I pay on Bitcoin and crypto?

Key points about crypto taxes:

Cryptocurrencies are legal in the UK
You must keep records of your crypto investments and transactions
HMRC treats profits occuring when exchanging crypto to GBP as subject to capital gains tax by default
If you’re accepting crypto for your sole trader services, treat them as payments in a foreign currency.

Do I pay taxes on crypto that I mined?

Yes, if the value of the coins you got from mining is over £1,000 in GBP equivalent.

Basically, HMRC treats cryptocurrency miners as traders, so you need to pay:

income tax
national insurance.

The good news: you can also claim expenses like electricity and mining rigs.

What if I trade cryptocurrencies often?

In theory, you should declare yourself a trader to HMRC and pay income tax and National Insurance.

Otherwise, you will be considered an investor by default and pay CGT.

Can I get relief on my losses?

Yes, but only for the same kind of income (investments or trading income, depending if you registered as a trader or not).

Do I need to worry about VAT for crypto transactions?

According to HMRC:

no VAT on mining;
no VAT for crypto-to-sterling or sterling-to-crypto exchanges;
if you charge cryptocurrencies for selling goods or services, then you need to calculate and pay VAT – in GBP.

Invest wisely.

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