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Many individuals don’t realise that buying, selling, or earning crypto could lead to tax liabilities. Whether you’re earning crypto as income or profiting from sales, you may need to pay Income Tax or Capital Gains Tax (CGT)
When you receive cryptocurrency through mining, staking, or as payment for goods and services, it’s treated as income. Just like your salary or rental income, you must declare it on your self-assessment tax return. The value of the crypto at the time of receipt, in GBP, must be reported. You’ll also need to keep accurate records to ensure your figures are correct.
Whether you're a sole trader accepting crypto for business transactions or a freelancer being paid in crypto, failing to declare this income can result in penalties. Carthy Accountants can help you ensure you're staying compliant, so you focus on building your business.
If you’ve sold or traded cryptocurrencies or NFTs and made a profit, you may need to pay Capital Gains Tax (CGT). This applies when you sell crypto for fiat currency, swap one cryptocurrency for another, or use crypto to buy goods and services. You’ll need to calculate the difference between what you originally paid for the asset and what you received when you disposed of it, ensuring all gains are reported in GBP.
It’s also important to note that you can use capital losses from previous years to offset gains, potentially reducing your tax bill. Keeping detailed records of every transaction is key, as each trade or sale could contribute to your overall tax liability. Carthy Accountants can help you navigate this process, ensuring your tax affairs are in order.
Yes, every transaction needs to be reported, even if it’s a small amount. You’ll need to track the GBP value of each trade and report any gains or losses.
HMRC requires all crypto transactions to be valued in GBP at the time of each transaction, meaning you’ll need to convert the crypto's value into pounds at the time of trade or sale.
Yes, losses can be offset against gains. This means that if you’ve made losses on some crypto trades, you can use them to reduce the tax you owe on your overall gains.
Yes, NFT trading is treated similarly to cryptocurrencies when it comes to CGT. If you’ve sold NFTs at a profit, you’ll need to pay CGT on the gains.
HMRC is paying increasing attention to crypto transactions, so ensuring you declare all income and gains from your activities is essential. Non-disclosure can result in investigations, penalties, and a higher tax bill. With Carthy Accountants, you'll get the expert advice you need to stay compliant and avoid unnecessary risks.
Crypto tax rules are complex, and keeping track of transactions can feel overwhelming, especially for frequent traders. You'll receive tailored guidance that not only helps you stay compliant but also optimises your tax position, allowing you to reinvest your gains effectively.
By properly managing your crypto assets and staying on the right side of HMRC, you'll get the peace of mind you need to focus on growing your business. At Carthy Accountants, we specialise in helping business owners like you navigate the complexities of tax, so you get the business you want; secure, compliant, and prepared for future growth.
Need help with your crypto taxes? Get in touch with Carthy Accountants today to ensure you're reporting everything correctly and getting the business you want with confidence and clarity.
