UK Crypto tax: crypto gains included in Tax Returns

UK Crypto tax

UK Crypto Tax

If you’ve made any gains through your cryptocurrency investments, it’s important to note that they must be included when filing taxes.

In many cases, HMRC considers crypto transactions as taxable income, so it pays to understand how it works and what you need to report to stay compliant with the law.

Here in the UK, crypto profits are taxed as Capital Gains Tax (CGT), and you should make sure all of your UK CGT tax is paid appropriately.

Fortunately, this doesn't need to be a complicated process.

If you’ve made any gains on your cryptocurrencies over the past year, you must calculate the amounts that you need to report on your UK tax return.

To do this, you will need to subtract the cost of purchasing the cryptocurrency (i.e. what you paid for it) from any gains made when selling it.

Any remaining amount is considered a taxable gain which should be reported as part of your UK Self-Assessment tax return.

In addition to the UK Capital Gains tax, you may also be liable for other taxes depending on your circumstances.

For example, if you’ve earned income from crypto activities such as staking or mining, then this should be reported on a self-assessment return too.

'Cryptoassets Taxation' policy

The UK government has also recently introduced a new ‘Cryptoassets Taxation’ policy which outlines when UK tax must be paid for Crypto and how much should be paid.

This information is available on the HMRC website or through their published guidance.

How to report Crypto

UK crypto tax

When reporting your cryptocurrency activity to HMRC, make sure you keep accurate records of all transactions.

This includes incoming and outgoing payments and any conversion from one form of cryptocurrency to another.

You must also include details like the date, amount and value of each transaction in your records.

In addition, you should also keep a record of any trading fees or commissions you pay and the wallet address used in each transaction.

This will help HMRC better understand your financial activity and can be essential to their investigation process.

Up-to-date records

Finally, ensure that all of your records are up-to-date so that if HMRC asks for them, you can provide the most accurate information possible.

This is especially important if you are filing a tax return, as HMRC will likely use your records to assess any taxes due on your cryptocurrency activity.

Keeping good records and staying organised with your financial activities is essential to compliance with HMRC when reporting crypto income.

Here to help

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This guide is an informative piece and does not constitute tax advice for individual matters.