Cryptocurrency tax in the UK – everything you need to know | Articles

The cryptocurrency market has attracted a great deal of interest from investors around the world for years, and the United Kingdom is no exception. While almost everyone has heard of them, for many people they remain a difficult subject to grasp, especially when it comes to the taxation of such transactions. It is worth learning more about this topic before trying your hand at investing in and trading cryptocurrencies.

Summary & key takeaways

Buying cryptocurrency is not taxed, but selling at a profit is.
Capital Gains Tax is due on crypto gains above the £3,000 annual allowance.
The CGT rate is 18% within the basic rate band and 24% above it.
Crypto received as pay is subject to Income Tax and NI contributions.
Keep records of every transaction — failing to report risks fines and court action.

In the article below we discuss the issues around crypto tax in the UK in line with HMRC’s guidance in force in July 2025. The text is for information purposes only and does not constitute legal advice. If you have further questions about reporting cryptocurrencies or want to discuss a specific case, we encourage you to contact an accountant or tax adviser.

Last updated: 2026-08-05

What are cryptocurrencies?

Cryptocurrencies (cryptoassets) are a digital representation of value or rights that is shared and stored within a decentralised, distributed and encrypted ledger based on blockchain technology. Bitcoin and Ethereum are the most widely recognised, but a quick look at what is available is enough to see that virtual currencies are a very broad category.

Do you have to pay tax on cryptocurrencies in the United Kingdom?

Trading cryptocurrencies in the United Kingdom is subject to tax, but the tax depends on the type of tokens and how they are used. For example: you will not pay tax in the UK on buying cryptocurrencies, but if you make a profit from selling cryptocurrencies or receive tokens, you may well have such an obligation. It also matters whether the transaction is made by an individual or a business.

Capital Gains Tax: The sale of cryptocurrencies by private individuals is subject to Capital Gains Tax. Paying CGT may be required as a result of:

selling cryptocurrencies,

exchanging one cryptocurrency for a different type of cryptoasset,
paying for goods or services with tokens,
giving cryptocurrency away to another person (apart from legally defined exceptions, e.g. a spouse or a charitable donation).
Income Tax: Receiving cryptocurrencies as part of your pay is treated as income and may require the payment of Income Tax and National Insurance contributions.
Inheritance Tax: Under HMRC guidance, cryptoassets are treated as property subject to tax in the case of inheritance.
Corporation Tax: All company income from exchanging and trading tokens must be included when calculating Corporation Tax.

Given the specific nature of cryptocurrency exchanges, data on individual transactions may not be available at the time of filing your tax return and during the verification process, which is why the responsibility for keeping the necessary records (in paper or electronic form) rests with those making gains from cryptocurrencies. For tax purposes you should keep information about every cryptocurrency transaction (disposal/acquisition), including: the type of asset, the date of acquisition/sale, the quantity, the value in pounds, bank statements and the wallet address.

How to report cryptocurrencies in the UK?

Income Tax If you receive tokens from your employer as part of your pay, how they are taxed depends on whether they qualify as readily convertible assets (assets that can easily be exchanged for cash).

If they do: the employer pays the Income Tax and National Insurance contributions due on the cryptocurrency, and then deducts this cost from other income paid to the employee (the employee is required to reimburse the employer for the costs incurred if they cannot be deducted from their pay).

If they do not: paying the tax and contributions is the employee’s responsibility and requires completing a Self Assessment
Tokens obtained from mining cryptocurrencies are treated as other taxable income. Receiving cryptoassets worth more than £1,000 in this way requires filing a Self Assessment.
Capital Gains Tax Paying Capital Gains Tax will be required if your gains from selling cryptocurrencies exceed the tax-free allowance (£3,000) in a given tax year. You can pay CGT by:

filing a Self Assessment tax return covering your cryptocurrency gains for the tax year,

reporting gains as you go, using the real-time Capital Gains Tax reporting service.

How much is cryptocurrency tax in the United Kingdom in 2025?

The rate of Income Tax depends on the level of your income. For the 2025/26 tax year (from 6 April to 5 April) it is:

personal allowance (0%): up to £12,570
basic rate (20%) for income between £12,571 and £50,270
higher rate (40%) for income between £50,271 and £125,140
additional rate (45%) for income above £125,140

Capital Gains Tax must be paid on gains from trading cryptocurrencies exceeding £3,000. It is worth stressing here that it is the gain itself that is taxed, not the sale amount - in other words, the difference in value between the time of purchase and disposal. The CGT rate depends on the sum of your total income and taxable gains:

if it falls within the basic rate of Income Tax, CGT is 18%,
CGT on the amount above the basic rate of Income Tax is 24%.

You can reduce the amount of tax by deducting from your cryptocurrency trading gains: capital losses (these must be reported to HMRC beforehand) and costs incurred, e.g. transaction fees or the costs of drawing up a transaction contract.

Are there penalties for not reporting cryptocurrency tax in the UK?

HMRC’s guidance clearly sets out the cases in which tax must be paid, as well as how and when gains and their source must be reported. Failure to comply with your tax obligations can result in financial penalties, for example, but also in the case being taken to court. The scope of the consequences of tax evasion in the UK may depend on, among other things:

the tax and the type of case (e.g. failure to report gains, failure to pay on time, providing incorrect information in a tax return),
the amount due,
the taxpayer’s conduct (e.g. a fine may be lower if the taxpayer comes forward to the authorities with information about arrears themselves).

Summary

Making gains or income above the tax-free allowance through acquiring/disposing of cryptocurrencies means having to pay the appropriate taxes. For this reason, anyone interested in trading cryptoassets should, from the very beginning, make sure they are familiar with the applicable regulations and collect the documents needed to evidence every transaction.

Need help with taxes in the United Kingdom?

Looking for professional tax advice in the UK to report Capital Gains Tax on cryptocurrency sales or income from other sources? Do you run your own Ltd company or work as a sole trader and want experienced specialists to take care of your accounting? Get in touch with us - our many years of experience are the best guarantee of the quality of the services we offer!

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