You’ve dipped a toe into the world of crypto. Maybe you’ve made a few trades, bought an NFT, or had a go at staking. But here’s the question that catches a lot of people out:

Do I need to declare crypto on my tax return?

If that’s you, you’re not alone. Many business owners, sole traders and investors don’t realise that dabbling in crypto can come with tax implications. And the last thing you want is a knock on the door from HMRC.

Let’s break it down.

Yes, Crypto Can Be Taxable

When you hear the word crypto, most people think of Bitcoin, Ethereum or NFTs. What you might not think about is the fact that crypto assets are treated as taxable by HMRC, depending on what you’ve done with them.

There are two main types of tax that could apply:

1. Capital Gains Tax (CGT)

This is the same tax you’d pay if you made a profit selling shares or a second home.
If you’ve sold, swapped, gifted or otherwise disposed of crypto assets, and made a gain - you may owe CGT.

2. Income Tax

If you’re earning crypto through mining, staking, or receiving crypto as a form of payment, HMRC may class it as income, which means income tax and possibly National Insurance could apply. That’s the same tax you’d pay on your salary or rental income.

Why It Matters Now More Than Ever

HMRC has been tightening its rules and guidance on crypto. And yes, they’re watching. They’ve already written to UK taxpayers asking for full disclosure of crypto activity. Ignoring it or assuming it doesn’t apply to you is risky.

If you don’t declare your crypto income or gains, you could face penalties or interest charges, even if it was unintentional.

So, what should you do?

What You Need to Do if You’ve Bought or Sold Crypto

If you’ve made any transactions involving crypto (buying, selling, staking, gifting, earning, or even swapping one crypto for another) it’s important to get your tax reporting right.

Here’s your simple 3-step checklist:

1. Track your transactions – Dates, amounts, value in GBP, and what happened (e.g. sold ETH for GBP, swapped BTC for SOL, etc).
2. Calculate any gains or income – This can be tricky, especially if you've done lots of transactions.
3. Declare it on your Self Assessment return – You’ll need to complete the capital gains and/or additional income sections.

If that all sounds a bit overwhelming, don’t worry.

Let’s Get You Back in Control

At Carthy Accountants, we help individuals and small business owners get clarity on their crypto tax obligations, so you can stay compliant, avoid unnecessary penalties, and get peace of mind.

Whether you’ve done a handful of trades or you’re heavily involved in crypto investments, we’ll help you:

• Understand what needs to be declared
• Report it accurately to HMRC
• Plan ahead for any tax liabilities
• Stay up to date with changing guidance

Don’t Leave It Too Late

Tax return season can be stressful enough without worrying about what HMRC might uncover. If you’re not sure whether your crypto activity needs reporting, or you just want to make sure you’re doing everything right, we’re here to help.

Get in touch with us today and we’ll help you get it sorted.

Get the Business You Want

Your business, and your financial choices, should give you the freedom to enjoy life, not keep you up at night worrying about tax. If crypto is part of your portfolio, let’s make sure it’s handled properly.

Getin touch. Helping you get the business (and peace of mind) you want.

The post Do You Need to Pay Tax on Crypto Gains? appeared first on Carthy Accountants.

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)

Income Tax on Crypto Assets

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.

Capital Gains Tax (CGT) on Crypto Trades

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.

Common Questions About Crypto and Tax

Do I need to report every trade?

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.

How do I value crypto for tax purposes?

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.

Can I offset losses?

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.

Is my NFT trading taxed the same way?

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.

Why Staying Compliant is Important

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.

Getting the Business You Want

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.

The post What You Need to Know About Crypto Assets and Tax appeared first on Carthy Accountants.