Crypto Tax in the UK: A Guide for Accountants

Cryptocurrency has moved firmly into the mainstream, and with it comes a real and often misunderstood tax obligation. For accountants — and anyone holding crypto — understanding how the UK taxes cryptoassets is essential. This guide explains how crypto is taxed in the UK, when capital gains tax and income tax apply, the records to keep, and why it matters — in plain language. (Tax rules and rates change frequently and crypto guidance evolves — always confirm the current position on GOV.UK or with a tax adviser before relying on figures.)

How is crypto taxed in the UK?

A common misconception is that cryptocurrency is somehow outside the tax system. It isn't. HMRC does not treat cryptoassets as currency or money, but as property for tax purposes — and that means gains and income from crypto are taxable. For most individuals, the key tax is capital gains tax (CGT), which applies when you "dispose of" cryptoassets. In some circumstances, income tax applies instead. Getting the treatment right depends on what you're doing with the crypto.

Capital gains tax on crypto

For most people who buy and hold cryptoassets as a personal investment, capital gains tax applies on disposal. Importantly, a "disposal" is broader than just selling for cash — it includes:

• Selling crypto for traditional currency.
• Exchanging one cryptoasset for another (a common trap — swapping tokens is a taxable disposal, even though no "real" money is involved).
• Using crypto to pay for goods or services.
• Giving crypto away (other than to a spouse or civil partner).

You pay CGT on the gain — the increase in value between acquiring and disposing of the asset — above the annual tax-free allowance. As confirmed by GOV.UK, for the 2026/27 tax year the annual exempt amount is £3,000, and CGT is charged at 18% (within the basic rate band) or 24% (for higher and additional rate taxpayers). HMRC also has specific "pooling" rules for working out the cost of crypto when you've bought the same token at different times.

When income tax applies instead

Not all crypto activity is a capital gain. In some cases, crypto is treated as income and subject to income tax (and potentially National Insurance). This typically applies when you receive cryptoassets as a form of earnings or reward, for example:

• Being paid in crypto for work.
• Income from mining, staking or airdrops, depending on the circumstances.

And in rarer cases — where someone is trading crypto with such frequency and organisation that it amounts to a trade — the profits may be taxed as trading income rather than capital gains. The distinction matters, so it's worth checking carefully.

Keeping records

Crypto tax is impossible to get right without good records, and HMRC expects you to keep them. You should record, for every transaction: the type of cryptoasset, the date, what you did (bought, sold, swapped, etc.), the number of units and their value in pounds at the time, and the cumulative position. Because exchanges don't always provide this in a tax-ready format, and because pooling rules apply, many people use specialist crypto tax software or an accountant. Poor records are one of the main reasons crypto tax goes wrong.

Why it matters for accountants

As crypto ownership grows, more clients have crypto tax obligations — often without realising it, especially around token-to-token swaps. For accountants, understanding how cryptoassets are taxed is increasingly important to advise clients correctly and keep them compliant. The area is also evolving, so staying current with HMRC's cryptoassets guidance is part of the job. It's a practical, growing area of UK tax.

Frequently asked questions

Do you pay tax on cryptocurrency in the UK?

Yes. HMRC treats cryptoassets as property, so gains and income from them are taxable — usually capital gains tax on disposal, or income tax where crypto is received as earnings or rewards.

What counts as a disposal for crypto CGT?

Selling crypto for money, exchanging one crypto for another, using crypto to pay for goods or services, and giving it away (except to a spouse). Token-to-token swaps are a commonly missed taxable disposal.

What are the current CGT rates and allowance for crypto?

Per GOV.UK for 2026/27, the annual exempt amount is £3,000, with CGT at 18% (basic rate band) or 24% (higher/additional rate). Always confirm current figures.

When is crypto taxed as income rather than gains?

When you receive cryptoassets as earnings or rewards — being paid in crypto, or income from mining, staking or airdrops — or, rarely, where activity amounts to a trade. Then income tax applies instead of CGT.

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