UK Crypto Tax: The Definitive Guide 2023

Last updated on January 13, 2023

If you’re trying to figure out how crypto is taxed in the UK, there’s certainly a lot to digest. HMRC have published an extensive manual regarding the tax treatment of cryptocurrencies and digital assets. 

In this up-to-date UK crypto tax guide, our tax experts explain everything to help you understand your crypto tax liability. You’ll find out when you need to pay tax on crypto, how much is crypto tax in the UK, how to save on your tax bill and how to use a crypto tax tool to file your taxes.

TL;DR – FAQs

Is Crypto Taxable in the UK?

Buying crypto with fiat currency such as GBP and holding is not taxable. However, when you make any trades or earn income on your crypto, you’ll have to report and pay taxes on your crypto income and gains.

I Made Money in Crypto. Do I Have To Pay Crypto Taxes?

Yes, if you have made money with cryptocurrencies in the UK, you are liable to pay crypto taxes. Any income earned or capital gains from selling or exchanging cryptocurrencies are taxable. The specific tax obligations applicable to your transactions will depend on the type and extent of your activities and your circumstances.

I Lost Money. Should I File Crypto Taxes?

Yes, you should file crypto taxes if you have lost money on your crypto assets. HMRC require you to report any gains and losses from your crypto investments on your tax return. Any losses can reduce your taxable gains, and the excess can be carried forward to future tax years.

I Lost Money in a Bankrupt Exchange. Can I Get Tax Relief? 

HMRC have yet to release any official guidance on claiming tax relief in the UK for funds lost on a bankrupt cryptocurrency exchange. It’s essential to exercise caution if the case of bankruptcy is ongoing, as funds may not permanently be lost and may still be partially recovered or refunded. You should consult a tax expert with your specific situation for precise information on the tax implications of a crypto exchange bankruptcy. 

Is Crypto Mining Taxable?

Yes, crypto mining is taxable in the UK. However, you must first determine if your mining activity qualifies as a trade or business. In either case, mining rewards are taxed based on the pound sterling value at the time of receipt of any coins or tokens received. 

According to HMRC, if the activity does not amount to a trade or business, it’s taxed as miscellaneous income. Any appropriate expenses will reduce the amount chargeable. If the activity amounts to a trade, you must calculate trading profits according to the relevant business tax rules. 

Do I Pay Taxes if I Buy Something With Crypto?

Yes, using cryptocurrency to pay for goods or services is considered a disposal, and it’s a taxable event. 

I’ve Never Filed Crypto Taxes but I Should Have. What Can I Do?

If you owe cryptocurrency taxes from previous tax years, an excellent first step would be to find a tax professional who can help guide you through filing late tax returns. You can also get set up with Accointing to accurately calculate your crypto taxes for any missed years. This will be required in filing any late tax returns.

If you’re wondering how to avoid paying tax on crypto in the UK, remember that tax evasion is a criminal offence that should not be taken lightly. Instead, you can look into ways to legaly reduce your tax bill such as tax loss harvesting

How Do I File My Crypto Taxes?

To file your crypto taxes, you’ll need to generate your tax report. The best way is to use a reliable crypto tax tool. To file your crypto taxes with Accointing, you’ll need to:

  • Import your data/wallets to the platform 
  • Make sure you have selected the correct country and tax method
  • Go through the four-step review process to ensure data is accurate
  • Generate your tax report

The following steps will depend on the method you use to submit your taxes. Whether you file directly to HMRC or use an online tool, our How to File Guide covers everything you need to know.

How to File Crypto Taxes UK Checklist

How is Crypto Taxed in the UK Explained

Crypto Capital Gains Taxes

What is Capital Gains Tax?

Capital gains tax (CGT) is the tax applied to profit made from selling (or ‘disposing of’) an asset. In simpler terms, if you bought a digital asset and sold it for profit, that profit would be subject to CGT.

When Does Capital Gains Tax Apply on Crypto?

As listed by HMRC, any sales, swaps, or spending of your cryptoassets will be deemed a disposal and liable to capital gains tax. This includes:

Capital Gains Tax on Crypto in the UK

How is Capital Gains Tax Calculated?

When calculating the gain, it is important to note that you do not pay CGT on the entire proceeds of your disposals, only the gain that is made. 

Example: 

Joe purchases 1 Bitcoin for £20,000 and sells it for £35,000

The capital gain here is £15,000, and Joe is liable to pay tax on this gain based on his capital gains tax rate

Capital Gains Tax-Free Thresholds

HMRC states that capital gains up to £12,300 are tax-free for the 2021-2022 tax year. However, this is subject to change for the following tax year. In a statement by the treasury, they announced a reduction in the threshold to £6,000 for the 2022-23 tax year and again to £3,500 the following year. 

What are the UK Crypto Capital Gains Tax Rates?

CGT rates depend on how much income you earn as an individual. If your taxable income is within the basic income tax band of £50,270, you will pay 10% on any capital gain. If you earn more, the rate is 20%. In short:

  • If your income was less than £50,270 – you will pay 10% on your crypto gains
  • If your income was more than £50,270 – you will pay 20% on your crypto gains

How Do I Report My Capital Gains?

You can safely use a crypto tax software such as Accointing to get an accurate crypto tax report.  Accointing handles all of the calculations for you. All you need to do is connect your wallets! From here, the platform does all the heavy lifting. You’ll also gain insights into your portfolio that will help you optimise your taxes.

Once you’ve generated your tax report with Accointing, you’ll find these 5 fields across the top of the first page of your tax report.

Accointing crypto tax software tax report

These have all the information required for you to report your crypto gains. The next steps will depend on your method of filing. Our How to File Guide covers everything you need to know.

HMRC Capital Gains Tax Guidance

For any further information on capital gains tax in crypto, refer to HMRC’s crypto assets capital gains tax guidance.

Crypto Income Tax UK

What is Income Tax?

Income tax applies to any wages, salaries, dividends, interest, or other forms of income earned throughout the year.

When Does Income Tax Apply on Crypto?

Income tax applies to any gain earned from activities such as staking and mining. This is distinguishable from capital gains tax as it doesn’t apply to selling or swapping your assets, but to the rewards you receive from them.

Crypto income can have many forms, but here is a useful rule of thumb. If you open up your wallet (or exchange account) and have more crypto coins than you had before, the new assets are recognised as ordinary income based on their value when you obtained control of the coins.

Income Tax-Free Thresholds

The standard personal allowance, or individual tax-free income, is £12,570. However, you do not get a personal allowance if you have taxable income over £125,140. It is essential to keep in mind that your income tax allowance also applies to the regular earnings from your employment, whether that be through PAYE or self-employment. 

What are the UK Crypto Income Tax Rates?

The table below shows you the tax rates applicable for each band (basic rate, higher rate, additional rate) based on your taxable income. 

More info and guidance can be found from HMRC

How Do I Report My Crypto Income?

If you have participated in activities such as staking, mining, airdrops or any event subject to income tax, then it needs to be reported in your tax return.

With Accointing, once you connect your wallets, the platform will calculate everything for you. As shown below, Accointing will break down your taxable income on the first page of your tax report. This is reported on the SA100 form when completing your tax return. For more information and a step-by-step walkthrough, head to our How to File Guide.

Taxable Crypto Disposals 

As listed in the capital gains section of this guide, taxable disposals are extremely common in crypto. This section delves into the details, looking at the specific rules and scenarios that are essential to be mindful of when calculating your crypto taxes. 

Pooling Method – Section 104

The pooling method refers to the tax methodology used by HMRC and determines the cost basis for your assets. It does this by grouping the same assets in your portfolio together in a section 104 pool; this creates an average cost for each asset.

For Example –  Joe buys: 

  • 1 BTC in 2019 for £4,000
  • 1 BTC in 2020 for £8,000 
  • 1 BTC in 2021 for £29,000

Joe’s section 104 pool would be £41,000 (£4,000 + £8,000 + £29,000). From here we can find out the cost per coin by dividing the pool by number of assets. 

In this case, the cost per coin would be £13,667 (£41,000/3 BTC). 

If Joe sold 1 BTC for £40,000, his gain will be £26,333 (£40,000 – 13,667). Let’s see how this works in an example similar to HMRC’s.

DateQty of BTCPooled allowable costs
20191£4,000
20201£8,000
20211£29,000
Total Pooled Costs3£41,000
  • You sell 1 BTC for £40,000
  • Consideration: £40,000
  • Less allowable costs £41,000 x (1/3) (£13,667)
  • Gain: £26,333
  • Pooled cost remaining, £27,333 allocable to 2 units of BTC
DateQty of BTCPooled allowable costs
Opening balance3£41,000
Sale of BTC(1)(£13,667)
Total Pooled Costs2£27,333

Bed and Breakfasting Rule

The ‘bed and breakfasting’ rule exists to prevent taxpayers from selling coins with unrealised losses, deducting the losses, and purchasing the same coins back, putting themselves in the same position as before but having claimed the tax losses.

If you dispose of coins/tokens and then repurchase the same coins/tokens within 30 days, then you use the basis of the newly purchased coins against your sale. Any excess coins acquired over what you disposed of go into the section 104 pool.

To simplify, If you have sold coins to harvest losses and want to avoid the bed and breakfasting rule, wait to buy back the same coins after 30 days. Finding another asset correlated to your first asset would be best if you want to keep market exposure during this period.

Same Day Rule 

This rule exists to simplify reporting in cases where multiple coins of the same type are acquired and disposed of by the same person on the same day. 

Rather than having to refactor the section 104 pools at each purchase and sale, all coins acquired that day are treated as if they were acquired in a single transaction, while all coins disposed of that day are also treated as disposed of in a single transaction. 

After this, the acquisitions get matched to the disposals so that only the excess goes into a section 104 pool (or uses section 104 pool costs if there are excess sales). Note that the 30-day rule (bed and breakfasting) would be considered before the section 104 pool.

Trader Rule 

While it is unlikely taxpayers with an extremely high trade volume may be eligible to report their actions as trading, not investing. However, there is no bright-line test to determine this.

HMRC explain that:

It’s worth noting that HMRC reiterates this concept throughout their Cryptoassets Manual. What we can conclude from this is that for you to qualify as a trader, you should actually have a business trading and not merely a hobby. 

How can you tell if you are in a trade? HMRC points us to BIM56800, which explores case law and other circumstances. If you are still determining whether your trading is considered a financial trade, it is best to seek advice from a tax professional.

If your activity is considered trading, you will be responsible for Income Tax on your financial trade. If your activity doesn’t count as trading, it’s an investment activity and will therefore be subject to Capital Gains Tax. 

Are Crypto Scams Deductible? 

Unfortunately, it’s common in crypto that an issuer of a coin (or NFT) disappears and leaves investors with a worthless asset. 

If you find yourself in this position and have received tokens that have become worthless, HMRC states you may be able to make a negligible value claim. However, a negligible value claim won’t be allowed if the tokens are worthless from the start. 

You can also claim the loss by sending the tokens to a burn address since you would be disposing of them and never be able to reacquire them. 

Is Stolen Crypto Deductible?

If your crypto is stolen, this is not considered a disposal. HMRC’s guidance claims that since you have the right to recover the asset, you cannot claim a loss for Capital Gains Tax.

Is Lost Crypto Deductible?

HMRC does not consider losing your private keys a disposal for Capital Gains Tax purposes. Therefore, losing your private keys will not suffice to claim a loss. 

They do expand that if it can be shown that there is no possibility of recovering your keys or accessing the coins, then a negligible value claim could be made, which has to be accepted by HMRC. If the claim is accepted, you will be treated as disposing and reacquiring the coins lost so that your loss can be claimed.

Crypto Gifts Taxation

Giving away tokens is still seen as a taxable disposal, therefore any tokens gifted will be subject to capital gains tax. The one exception to this rule is if you are gifting assets to your spouse, which can be a useful tactic if they haven’t used all of their capital gains allowance. 

Donations

Tax relief is available for donations to UK and some EU-based charities. For more information, refer to HMRC guidance.

In addition, you will not have to pay Capital Gains Tax on the donated crypto, provided that the donation is not a tainted donation (kickback) or if the crypto is sold to the charity for more than the acquisition cost. 

Crypto Income 

Getting Paid In Crypto 

If you get paid in crypto, this is considered ‘money’s worth’, and the payments are subject to both Income Tax and National Insurance Contributions on the cryptoassets’ value.

Income Tax on Crypto for Individuals 

The rate at which your earnings will be taxed is determined by the tax bracket you fall into as an individual. Refer to the table above in the income tax section or to HMRC’s breakdown of the tax brackets. 

Income Tax on Crypto for Businesses

If you are using crypto for business purposes, such as accepting it as payment for goods or services, you will also have to pay tax on any profits you make from these transactions. These profits will be subject to corporation tax at the standard rate of 19%. 

Mining Income Tax

Whether mining amounts to a trade or business, mining rewards are taxed based on the pound sterling value at the time of receipt of any coins or tokens. Any assets that the miners keep will also be subject to capital gains tax or corporation tax when they are disposed of.

Crypto Mining Tax as an Individual

If you’re using your personal computer that has spare capacity to mine tokens, you would typically be considered to be mining as an individual. According to HMRC, If the activity does not amount to a trade or business, it is taxed as miscellaneous income with any appropriate expenses reducing the amount chargeable. 

Crypto Mining Tax as a Business 

Note that HMRC does not expect that most individuals would have enough activity to carry on a trade; they outline what may be considered a business as:

Staking Income 

Any income received as a result of staking will be subject to income tax. Regardless of whether staking amounts to a trade or business, staking rewards are taxed based on the pound sterling value at the time of receipt of any coins or tokens received. 

According to HMRC, If the activity does not amount to a trade or business, it is taxed as miscellaneous income with any appropriate expenses reducing the amount chargeable. If the activity amounts to a trade, then profits must be calculated according to the relevant business tax rules. 

If the individual or business keeps the coins received, then Capital Gains Tax or Corporation Tax on Chargeable Gains is applicable upon disposal of the coins. 

Node Income

HMRC are yet to issue any guidance on the taxation of nodes. However, various taxable events are associated with nodes. You will likely be required to pay taxes on any income from running a node. 

The tax treatment of any income will be determined by the business status in which the node is being run. If you are running the node as an individual, you would generally be required to report your income in your personal tax return and pay taxes at your individual rate.

Any income will be subject to the relevant business tax rules if you are operating your node business as a limited company. 

Master Node Income

Again, HMRC still need to provide clear guidance on this topic. However, one thing to consider is if you’re running a master node as a service and charging fees to users. You may be operating as a business and subject to subsequent tax rules.

It is crucial to remember that the tax treatment of master nodes could vary depending on the specific circumstance. It is always a good idea to consult with a tax professional to ensure that you comply with all applicable tax laws.

Hardforks 

If you have received coins or tokens due to a hardfork, then the assets acquired will not be subject to income tax. However, they will likely be subject to Capital Gains Tax when sold.

As stated by HMRC, the cost basis will be attributed to the cost of the original coins/tokens. Following the fork, the new tokens must be placed in their own section 104 pool. Any allowable costs in the initial section 104 pool are split between the two section 104 pools for the original and new tokens.

Softforks and Protocol Updates

Since no new coins are created for soft forks, the fork is ignored for tax purposes.

Yield Income From Stable Coins

The key word here is income, similar to staking your cryptoassets, any yield or reward earned from your stable coins will be subject to income tax.

Airdrops

Airdrops may or may not be taxable income depending on whether you received the coins/tokens in a personal capacity or in exchange for services.

HMRC explain that where coins were received without doing anything in return and not part of a trade or business involving cryptoasset exchange tokens or mining, income tax will not apply to any airdropped tokens.

However, if the tokens are airdropped in exchange for services, income tax will apply, and the value of the coins at the time of receipt will be considered either miscellaneous income or gross receipts of the trade or business. 

Regardless of whether the acquisition of the airdrop is subject to income tax, CGT will apply to the disposal in either case. 

Scam Airdrops and Unwanted Coins

If an airdrop of an NFT has no value or is a scam, you can report it for £0 or a nominal amount and send it to a burn address. This will dispose of it for £0 proceeds and £0 cost basis for no impact on your tax return. 

Some wallets, such as Phantom wallet on the Solana network, have a burn function in exchange for a nominal amount of SOL (your proceeds).

If an airdrop of unwanted coins or tokens has more than a nominal value, then it is unlikely that a taxpayer would refuse this and generally choose to trade and keep the funds, in which case the transaction should be taxable.

Non-taxable Transactions 

Purchasing Crypto With Fiat (GBP) 

It is not a taxable transaction if you purchase crypto with Fiat currency (such as GBP) through either an exchange or over the counter. Any Future transactions on your newly acquired cryptoassets, such as swaps, selling back to fiat or using it to make a purchase, will be taxable. 

HODLing 

HODLing is a term you may have come across in crypto. “HODL” derives from the misspelling of the word “hold” and was popularised by the Bitcoin and cryptocurrency community to stand for “hold on for dear life”. As a result, it is frequently used to describe the tactic of only buying and holding cryptocurrency. 

From a tax standpoint, simply buying and HODLing a digital asset is not taxable. If you are earning income (rewards, staking, yield, etc.) on this asset, that income is taxable as ordinary income.

Internal Transfers

Transferring crypto between two of your own wallets, whether a hot or cold wallet, is not taxable. 

The Accointing platform will automatically identify any internal transactions saving you from being taxed on them. For extra measure, you will be asked to verify any potential internal transactions to ensure none are missed.

Important –  Some tax reports assume that all transfers out are taxable as they do not know you are transferring crypto to yourself. It’s essential to exercise caution, especially with exchange tax reports. We recommend verifying its accuracy by connecting the exchange/wallet to Accointing.

Hardforks

As previously mentioned in the Crypto Income section, HMRC does not consider coins received from hard forks as income. Therefore they are not subject to income tax.

However, they may be subject to Capital Gains Tax when sold, swapped, spent, or gifted (excluding gifting to a spouse). Any profit made from these actions will be subject to Capital Gains Tax. 

Lending

Lending your crypto can be both taxable and non-taxable. For it to qualify as the latter, beneficial ownership of the coins/tokens must not be transferred and must remain with the lender. 

According to HMRC, determining which party holds beneficial ownership of the asset would require an examination of the contract and terms and conditions. 

Despite no bright-line test being provided, they state that if the recipient of the asset is restricted from dealing the coins/tokens, this would be a strong indicator that beneficial ownership has yet to be transferred. 

Certain Airdrops 

As stated previously, certain airdrops will be non-taxable. This depends on whether you received the coin/token in a personal capacity or in exchange for services.

HMRC explain that where coins were received without doing anything in return and not part of a trade or business involving cryptoasset exchange tokens or mining, income tax will not apply to any airdropped tokens.

Donations

UK tax law allows for tax-free donations of crypto to registered charities. Individuals who donate cryptocurrency to charity may claim Income tax relief on the donated amount.

Additionally, Capital Gains Tax will not apply to the donated cryptocurrency, as long as the donation is not a tainted donation (kickback) or if the cryptocurrency is sold to the charity at a higher price than the acquisition cost.

Further information can be found in HMRC’s guidance

Tax Authority and Compliance

Tax Authority

The tax authority in the UK for cryptoassets is HM Revenue and Customs (HMRC). Their website for cryptoassets and official guidance published can be found here.

Their Enforcement Policy outlines the steps that HMRC may take in cases where individuals or businesses fail to comply with their tax obligations related to cryptoassets.

HMRC’s Stance – TL;DR 

HMRC have taken a proactive approach to give guidance on most areas of cryptocurrency taxation. If you’re a UK resident and taxpayer that holds cryptocurrency, be aware that most actions in crypto will likely incur some form of taxable event. As a result, paying taxes on your crypto investments should not be ignored. 

If you need clarification on your residency status, HMRC offer a test for you to check. If you still have questions about UK residency or tax liability, speak with a tax professional.

Crypto Anonymity

Contrary to popular belief, cryptocurrency transactions are rarely anonymous. With tools such as blockchain explorers, anyone can view all of your transactions. Even wallets without Know Your Customer (KYC) requirements may still be linked to KYC-compliant accounts, which can reveal the user’s identity. 

Mixers, designed to hide the origin of funds, can also be traced by forensic data providers like AnChain, Chainalysis, Coinfirm, and Crystal. It is important to note that gains from trading cryptocurrency are subject to capital gains taxes and that cryptocurrency income is taxable as ordinary income. 

The UK’s HM Revenue & Customs (HMRC) has been collecting data on cryptocurrency transactions, so it is advisable to report any income and gains to avoid potential issues. Remember, wilful tax evasion is a criminal offence. 

Tax Year Deadlines

In the UK, the financial year runs from April 6th to April 5th of the following year. The deadline to file and pay your returns is January 31st of the following year. 

For example, for the financial year running from April 6th, 2021 – April 5th 2022, the filing and payment deadline is January 31st, 2023. And for the financial year of April 6th 2022 – April 5th 2023, the deadline will be January 31st, 2024.

These deadlines apply to filing online or through your accountant, if you file a paper tax return then filing deadlines are October 31st. More information on filing and payment deadlines can be found here on HMRC’s website

If you are struggling with your crypto taxes, our How to File Guide breaks down everything you need to know about filing.

Paying Your Taxes

When paying off taxes from your self-assessment, the first thing you will need is your UTR (Unique Taxpayer Reference) number. 

Payment can be made directly through HMRC’s website using online banking or through the HMRC app. You can also pay via bank transfer, in which case, be sure to use the correct details for HMRC

You can make weekly or monthly payments if you prefer to avoid paying them off all at once. You can also get help if you are struggling to pay your taxes on time. HMRC allow you to set up a payment plan of instalments. This is referred to as a ‘Time to Pay’ arrangement. 

For more information on specific areas of paying your self-assessment tax return, refer to HMRC’s payment page.

Tax Rates and Thresholds

Capital Gains Tax

As mentioned previously in the capital gains section, the tax rate applied to your gains depends on how much income you earn as an individual. If your taxable income is within the basic income tax bracket of £50,270, you will be charged a CGT rate of 10% on any capital gains. If you earn more than this amount, the rate increases to 20%.

In summary:

  • If your income is below £50,270 – you will pay a CGT rate of 10% on your cryptocurrency gains
  • If your income is above £50,270 – you will pay a CGT rate of 20% on your cryptocurrency gains

As for CGT thresholds, HMRC state that individuals are entitled to up to £12,300 tax-free capital gains for the 2021-2022 tax year. However, this is subject to change for the following tax year. In a statement by the treasury, they announced a reduction in the threshold to £6,000 for the 2022-23 tax year and again to £3,500 the following year. 

Income Tax

The table shows the tax rates applicable for each band (basic rate, higher rate, additional rate) based on your taxable income.  

As shown above, the tax-free income threshold for individuals is £12,570. If you have taxable income over £125,140, you are not entitled to any personal allowance. 

Remember – Your income tax allowance also applies to the regular earnings from your employment, whether that be through PAYE or self-employment.

Penalties

HMRC automatically impose a £100 late filing penalty for anyone who is required to file a return but misses the deadline; if you already have an online account, the penalty will be charged to it.

Whether or not you owe tax is irrelevant; the penalty is still applied. After three months, additional fines are issued; if there is a substantial amount of unpaid tax, these fines may depend on the amount of tax you owe. You will also be charged interest on any outstanding and overdue taxes in addition to these penalties.

Recordkeeping 

The HMRC is very clear in their guidance when they state that:

We recommend keeping all of the following records indefinitely:

  • Hot or cold crypto wallet addresses containing crypto transactions
  • Other records, such as transaction history files from exchanges (and wallets)
  • Bank statements or other records showing the deposits and withdrawals of fiat currency
  • Transaction history containing all of the following information:
    • Type of cryptoassets
    • Date of every transaction
    • Type of transaction
    • Units of crypto and value in GBP at the time of the transaction
    • The cumulative total of assets

Fortunately, this information will be automatically kept for you with Accointing. You should keep a copy of your tax report, all other files provided (such as the full data set), and a copy of any CSV or excel files uploaded to Accointing

If you have used any API and blockchain connections, keep the blockchain address and API keys. In case you ever get audited, this way you’re able to recreate the results.

Use of Tax Losses

As you can offset any losses against any capital gain you have made, you should keep thorough records of them and report them to HMRC.

Although you are not required to pay Capital Gains Tax on losses, keeping track of and reporting them will reduce the amount of tax you have to pay.

It is important to note that capital losses can’t offset income, but they can be carried forward indefinitely against future gains.

Tax loss Harvesting

Given the volatility of the markets and how easy it is to trigger a taxable event, such as pressing a button from a mobile app, you can see how easy it can be to plan and sell your cryptos at a loss to claim the tax loss. This is known as tax loss harvesting. 

Tax loss harvesting means selling cryptoassets with unrealised (paper) losses in order to realise those losses and take them on your tax return. Since we know that losses can offset capital gains, tax loss harvesting can save you tax money.

What is the catch? You will take a lower tax basis on any new asset purchased. Therefore any future gains will be more significant. Generally, it is better to lower today’s taxes than tomorrow’s. Remember to consider the bed and breakfasting rule if you plan on repurchasing the same asset you have sold. 

Reporting Your Crypto Taxes

Your crypto taxes should be reported using the SA100 form in your self-assessment tax return, as you’ll need to report any crypto subject to income tax or capital gains tax. For more details on reporting these taxes specifically, please refer to the CGT and income tax sections at the top of this guide. 

Alternatively, head to our How to File Guide, which will provide you with everything you need to know. 

If You Haven’t Filed in the Past

First, you should assess whether you have exceeded the yearly capital gains allowance. These are:

  •  £12,300 for the 2022-23 tax year

  •  £6,000 for the 2023-24 tax year 

  •  £3,000 for the 2024-25 tax year


If you are under the tax-free allowance, make sure to keep your tax reports and report your taxes when you are over this allowance. If you should have filed, we recommend seeking the advice of a tax professional. 

Receiving a Letter From HMRC

If you have received a letter from HMRC, it is best to be open and cooperate with their request, and be sure to report all of your crypto trades and income in your Self Assessment tax return. When in doubt, consult your tax advisor.

Accointing by Glassnode Crypto Tax Calculator

Connecting to Accointing by Glassnode

For Accointing to provide you with an accurate tax report, it is critical that you connect all your wallets and exchanges, including cold storage wallets. 

Your crypto taxes depend on all of your transactions, so if you do not connect a wallet, we will not be able to identify the non-taxable transfer, nor will you be able to track the tax basis of the crypto. 

To connect your wallets, simply head to the wallet tab on the dashboard of the web app, and you’ll see an ‘add new’ button. From here, you can upload data from your exchanges, external wallets or even complete data sets.

Connecting wallets, exchanges or services via the API key will allow any future transactions also to be included on the Accointing platform. This prevents you from going back and forth connecting wallets and ensures the data you see on the platform is live and up to date.

Review Steps

Upon importing all wallets and exchanges, we provide a four-step guide. This is where Accointing will expose any missing data and ensure that the portfolio accurately reflects reality, allowing the user to generate an accurate tax report.

  1. Unknown Currencies: There are constantly new cryptocurrencies being introduced to the market; however, many of these are not tradable or legitimate projects. As a result, it may be necessary to manually identify and assign the correct currency to certain coins. This step allows you to identify such coins and assign the correct currency.
  2. Identifying Internals: Internal transactions, which are made between two of your own wallets, are not subject to taxation. We automatically identify these transactions through the transaction hash on the blockchain and will request your confirmation before proceeding. These types of transactions will be classified as internals and will have no tax relevance.
  3. Classify Transfers: It is essential to correctly categorize your transactions for the accuracy of your tax report. We can usually determine the type of deposit or withdrawal (such as Mining, Staking, Swap, Payment, Liquidity Pool Income, etc) based on the data available. However, if the information is incomplete, we will not make assumptions and instead require manual classification by the user. Some classifications may have different tax consequences depending on the country in which you are filing. For country-specific guidance on which classifications trigger a taxable event, click here.
  4. Missing Funds: This step will expose any incomplete data in your trade history. There are two functions involved. The first section compares our computer balances to live balances. If there is a discrepancy, we will request the taxpayer to look into it. Otherwise, users can reconcile this transaction based on the missing value. The second function involves looking at individual trades or coin withdrawals. If there is missing buy information, we will ask the taxpayer to examine it. “Fix for me” will reconcile by creating a deposit with the missing amount.

Downloading Your Report from Accointing

Everything will be set once you have completed the review steps, and you’ll be ready to download your tax report. You can always go back and correct any potential errors in your report if you’re unhappy or find that something is wrong. 

If you have paid to generate a tax report for that financial year, you can amend the data and redownload it as many times as necessary to ensure that it is 100% accurate. 

How Does Accointing Simplify my Crypto Taxes?

If like many crypto investors, you are using multiple exchanges and wallets to buy and sell tokens, then your tax position will be dependent on each wallet and exchange you use. Therefore, if you want to calculate your taxes accurately, you need to keep records of every single transaction across all your wallets and exchanges. 

As you may imagine, manually capturing this data would be a logistical challenge. Even then, you would have to hand that data to your accountant for them to determine any gains or losses you may have incurred. 

Accointing can automate all of the above, as everything on the blockchain is recorded. By connecting your wallets, our crypto tax calculator can generate a full tax report and a complete breakdown of all your transactions.

Once your tax report has been generated in accordance with HMRC guidelines (using the pooling method and the same day and bed and breakfast rules), you can easily obtain all of the necessary information to file your Self Assessment Capital Gains Summary (SA108), which will be included with your SA100 Self Assessment Tax Return. 

How Can Accointing Help Me Save Money On My Taxes?

To further the information above, the platform’s automation will save you from gathering your transactional data and paying someone else to make sense of it. 

On top of this, the ‘overview’ page will give you a wealth of insight into your portfolio and its performance, all of which can be tracked at any time online or on the go using our mobile app. 

Example

You’ll also see a breakdown of each asset’s current profit and loss status and how well your portfolio has performed as a whole over time. All of these can be combined to maximise the return on your investments and legally minimise your tax liability.

When the time comes to figure out your tax liability, our 4-step review process will ensure that each transaction is classified correctly, avoiding any of your transactions being taxed unnecessarily. We will also identify and iron out any internal transactions (transfers between your own wallets) to ensure you are not getting taxed for moving your crypto off of exchanges. 

Which Classifications are Taxable

For a breakdown and explanation of each transaction type, visit our main classifications guide. To see which specific classifications are taxable in the UK, refer to our UK classifications guide

The information contained in this guide is for general information purposes and does not constitute financial, investment, legal or tax advice. The present content is not intended as a thorough, in-depth analysis, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. Please consult your tax advisor.

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