How to Report Crypto Income in the UK: Your Complete 2024 Tax Guide

Understanding Crypto Tax Obligations in the UK

If you’ve earned cryptocurrency through trading, mining, staking, or other activities in the UK, you must report it to HMRC. Unlike traditional currencies, crypto is classified as a capital asset or income depending on the activity. Failure to properly declare crypto earnings can result in penalties up to 100% of the owed tax plus interest. According to HMRC’s Cryptoassets Manual, all UK residents must report:

• Capital gains from selling or exchanging crypto
• Income from crypto mining, staking, or airdrops
• Payment received in cryptocurrency for goods/services
• DeFi lending rewards and NFT transactions

When Must You Report Crypto to HMRC?

You’re legally required to report crypto activity if:

• Your total taxable gains exceed the £6,000 Capital Gains Tax allowance (2023/24)
• You received over £1,000 in crypto income (trading allowance threshold)
• You’re a business accepting crypto payments
• Your total disposal proceeds exceed 4x the CGT allowance (£24,000)

Even if below thresholds, keep detailed records for at least 5 years. Tax years run from April 6 to April 5.

Step-by-Step Guide to Reporting Crypto Income

1. Calculate Your Taxable Amounts

For Capital Gains Tax (CGT):

• Gain = Selling price – Purchase price – Allowable costs (fees)
• Use the same-day rule and 30-day rule to identify disposals
• Apply the £6,000 annual exemption

For Income Tax:

• Value crypto at GBP equivalent when received
• Include mining rewards, staking income, and payment for services

2. Gather Required Documentation

• Transaction history from all exchanges/wallets
• Records of GBP value at transaction time
• Proof of acquisition costs and fees
• Records of crypto-to-crypto trades

3. Complete Your Self Assessment

1. Register for Self Assessment by October 5 following the tax year
2. Report capital gains in the SA108 form (Capital Gains Summary)
3. Declare crypto income in the SA100 main return (Box 17 for self-employment or Box 1 for miscellaneous income)
4. Submit online by January 31 following the tax year end
5. Pay owed taxes by the same deadline

Common Crypto Reporting Mistakes to Avoid

• Ignoring crypto-to-crypto trades: Each swap is a taxable disposal
• Forgetting small transactions: Even £10 transactions accumulate
• Miscalculating cost basis: Use FIFO (First-In-First-Out) method unless using specific identification
• Missing deadlines: Late filings incur £100 immediate penalties
• Omitting DeFi activities: Liquidity mining rewards are taxable income

Frequently Asked Questions (FAQs)

Do I pay tax if I transfer crypto between my own wallets?

No – transfers between wallets you own aren’t disposals. Only report when changing ownership (selling, trading, spending).

How is staking income taxed in the UK?

Staking rewards are treated as miscellaneous income at their GBP value when received. You’ll pay Income Tax at 20%-45% depending on your band.

What if I lost money on crypto investments?

Report capital losses on SA108. These can offset gains in the same year or be carried forward indefinitely to reduce future tax bills.

Are NFT sales taxable?

Yes – NFT disposals follow CGT rules. If creating/selling NFTs as a business, profits are subject to Income Tax instead.

Can HMRC track my crypto?

Yes. Since 2019, UK exchanges must share customer data under Common Reporting Standard (CRS). HMRC uses blockchain analysis tools to identify non-compliance.

Staying Compliant with HMRC

Use crypto tax software like Koinly or CoinTracker to automate calculations. Consider professional advice if you have complex transactions or over £50,000 in gains. Remember – voluntary disclosures typically result in lower penalties than if HMRC contacts you first. Keep learning through HMRC’s Cryptoassets Manual and update records monthly to avoid year-end scrambling.