How to File Crypto Tax in the UK

How to File Crypto Tax in the UK

If you are a UK resident investing, trading, or earning cryptocurrency, understanding your tax filing obligations is essential. HMRC treats cryptocurrency as property, which means every taxable transaction — whether selling, exchanging, earning, or using crypto — must be reported.

This guide explains UK crypto tax rules for 2026, step-by-step filing instructions, common mistakes to avoid, and how Kryptos can simplify the process.

How Crypto Is Taxed in the UK (2026)

1. Capital Gains Tax (CGT)

• Selling crypto for fiat or exchanging one crypto for another can trigger CGT.
• Gains are calculated as:
  Gain = Sale Price – Cost Basis – Allowable Fees
• UK residents benefit from an annual CGT exemption (for the 2025/26 tax year: £6,000).
• Gains above the exemption are taxed at:
  • 10% for basic-rate taxpayers
  • 20% for higher-rate taxpayers (for most assets)

2. Income Tax

• Crypto received as payment, staking, mining, or airdrops is taxed as income.
• Applicable income tax rates range from 20% to 45%, depending on your income bracket.

3. NFTs, Gifts, and Donations

• NFTs are treated as capital assets, and gains are subject to CGT.
• Crypto received as a gift is generally only taxed when you dispose of it.
• Donations to registered charities may provide tax relief but must meet HMRC conditions.

Step-by-Step Filing Instructions

1. Collect Transaction Records

Gather all crypto activity for the tax year 6 April 2024 to 5 April 2025, including:

• Exchange trades
• Wallet transfers
• NFT purchases and sales
• Mining and staking income
• Gifts and airdrops

2. Calculate Gains and Income

• Use cost basis (original purchase price plus fees).
• Apply the FIFO (First-In, First-Out) method unless you can specifically identify crypto units.
• Clearly separate:
  • Capital gains (CGT)
  • Income events (Income Tax)

3. Convert to GBP

• All transactions must be reported in GBP at the transaction date.
• Use HMRC-approved exchange rates or reliable daily market rates.

4. Report on HMRC Forms

• Capital Gains: Report on the SA108 supplementary page.
• Income: Report on the main Self Assessment form (SA100).
• File online through the HMRC portal by 31 January 2026.

Recordkeeping and Supporting Documentation

You must retain records for at least 5 years after submission.

Keep:

• Exchange/exported transaction histories
• Wallet addresses and blockchain proofs
• Receipts for fees and costs
• Details of gifts, donations, or received crypto

Strong records are essential for audit protection.

How Kryptos Helps You File UK Crypto Taxes

Kryptos simplifies UK crypto tax filing by:

• Automatically imports transactions from exchanges and wallets.
• Calculates accurate gains and income in GBP.
• Differentiating taxable and non-taxable events
• Produces ready-to-file HMRC reports (SA108 and SA100 integration).
• Highlights missing transactions to avoid penalties.
• Maintains full audit-ready documentation for HMRC compliance.

Common Mistakes to Avoid

• Misclassifying income as capital gains or vice versa.
• Ignoring NFT or DeFi transactions.
• Failing to convert all transactions to GBP accurately.
• Overlooking transaction fees in cost basis.
• Missing the annual CGT exemption.
• Late submission, which may incur penalties.

Avoiding these errors reduces audit risk and unnecessary tax payments.

Frequently Asked Questions

1. Do I need to report all crypto transactions in the UK?
Yes. All taxable disposals and crypto income must be reported to HMRC.

2. Is mining or staking crypto considered income?
Yes. Mining rewards, staking rewards, and airdrops are taxable as income.

3. How do I calculate capital gains?
Gain = Sale Price – Cost Basis – Fees, using FIFO unless specific identification applies.

4. Are NFT transactions taxed?
Yes. NFTs are treated as capital assets, and gains are subject to CGT.

5. What if I transferred crypto between my own wallets?
Internal transfers are not taxable and do not need to be reported.

6. Can Kryptos simplify crypto tax filing?
Yes. Kryptos automates transaction imports, calculations, and generates HMRC-ready reports.

Conclusion

Filing UK crypto taxes for the 2025/26 tax year requires accurate tracking of all transactions, correct cost basis calculations, and clear separation between capital gains and income.

Using a platform like Kryptos helps automate recordkeeping, generate HMRC-ready reports, reduce errors, and ensure full compliance — while helping you avoid overpaying tax and unnecessary penalties.