How to Report Crypto on Taxes (Without Stress)

Crypto taxes can feel like navigating a maze blindfolded. One moment you’re riding the wave of a brilliant investment, and the next you’re buried in spreadsheets, wondering which transactions you need to report and how to avoid a nasty letter from HMRC. The good news? It doesn’t have to be stressful.

If you’ve bought, sold, traded, or earned cryptocurrency in the UK, you’ve got tax obligations. But with the right approach, understanding what triggers a tax event, keeping solid records, and using the tools designed to make this easier, you can report your crypto activity confidently and accurately. Whether you’re a casual investor with a few trades or deeply involved in DeFi and staking, this guide walks you through the entire process without the overwhelm.

Let’s break down how to report crypto on your taxes in a way that won’t leave you tearing your hair out.

Understanding Your Crypto Tax Obligations

First things first: you must pay tax on crypto in the UK. HMRC considers cryptocurrency a taxable asset, and ignoring this won’t end well. Understanding your obligations upfront is the foundation for stress-free reporting.

Two main taxes apply to crypto activity: Capital Gains Tax (CGT) and Income Tax. CGT kicks in when you dispose of crypto, selling it, trading one coin for another, or spending it on goods and services. You’re liable for CGT on gains exceeding the annual allowance, which currently stands at £3,000. Any profit above that threshold is taxed at either 10% or 20%, depending on your overall income level.

Income Tax, on the other hand, applies when you receive crypto as payment or earn it through activities like mining or staking. This income is added to your other earnings for the tax year and taxed according to your income band. If your total income exceeds the £12,570 personal allowance, you’ll owe tax on the excess.

The key is knowing which tax applies to each transaction. Miss this distinction, and you risk under-reporting or paying the wrong amount.

What Counts as a Taxable Crypto Event

Not every crypto activity triggers a tax event, but many do. CGT applies whenever you dispose of crypto. This includes:

• Selling crypto for pounds sterling (or any fiat currency)
• Trading one cryptocurrency for another (yes, swapping Bitcoin for Ethereum counts)
• Using crypto to purchase goods or services (that coffee you bought with Bitcoin? Taxable)
• Gifting crypto to someone other than your spouse or civil partner

Simply holding crypto doesn’t create a taxable event. You could sit on your Bitcoin for decades without owing HMRC a penny, until you dispose of it.

For Income Tax, taxable events include:

• Mining rewards (when you successfully mine a block)
• Staking rewards (interest or tokens earned from staking)
• Being paid in crypto (salary, freelance work, or any employment income)
• Airdrops received in exchange for a service or as part of a marketing campaign

Understanding what counts helps you identify which transactions need reporting. Miss a taxable event, and you’re opening the door to penalties.

Different Tax Treatment for Various Crypto Activities

Different activities attract different tax treatments, and mixing them up is one of the most common errors.

Trading and investing fall under CGT. If you’re buying and selling crypto for profit, you’re in capital gains territory. The same goes for swapping coins or spending crypto. HMRC treats each disposal as a separate CGT event, so if you traded ten times in a year, you’ve got ten potential gain or loss calculations.

Mining and staking are treated as income. When you mine a new coin or earn staking rewards, the fair market value of that crypto at the time you receive it becomes taxable income. Later, if you sell or trade those coins, you’ll also owe CGT on any increase in value since you received them. In other words, mining and staking can trigger both Income Tax and CGT, just at different stages.

Getting paid in crypto is straightforward: it’s income. Whether you’re a freelancer accepting payment in Bitcoin or an employee receiving part of your salary in crypto, the value at the time of receipt counts as earnings subject to Income Tax and National Insurance.

Gifting crypto to anyone other than your spouse is a disposal for CGT purposes. Transfers between spouses or civil partners, but, are exempt, at least until the recipient eventually disposes of the crypto themselves.

Each activity demands accurate identification and reporting. Categorise incorrectly, and you’ll miscalculate what you owe.

Gathering Your Crypto Transaction Records

Good record-keeping is your best defence against stress and mistakes. HMRC expects you to maintain comprehensive records of all your crypto activity, and ‘I can’t remember’ won’t cut it if they come knocking.

Your records should include:

• Transaction dates (when you bought, sold, traded, or received crypto)
• Type and amount of cryptocurrency involved
• Transaction values in GBP at the time of the transaction
• Counterparty information (which exchange or wallet you used)
• Acquisition costs and disposal proceeds
• Fees and commissions (exchange fees, network fees, etc.)

The more detailed your records, the easier it is to calculate gains, losses, and income accurately. And if HMRC ever queries your return, you’ll have everything you need to back it up.

Most exchanges and wallets make this relatively painless. They offer transaction history downloads, usually as CSV files or PDF statements, that list your activity. But the onus is on you to collect and organise them.

Locating Transaction History Across Multiple Exchanges

If you’ve used multiple exchanges or wallets, you’ll need to gather records from each one. This is where things can get fiddly, especially if you’ve dabbled across several platforms over the years.

Start by listing every exchange, wallet, and platform you’ve used. Then log into each one and download your transaction history. Look for ‘Account History’, ‘Transaction Reports’, or ‘Tax Reports’ sections, most major exchanges like Coinbase, Binance, and Kraken offer these.

Don’t forget smaller or lesser-known platforms. Even a handful of trades on an obscure exchange count toward your tax liability. If an exchange has shut down or you’ve lost access, try contacting support or checking your email for old trade confirmations.

Once you’ve gathered everything, combine the data. Automated software (more on that shortly) can import and merge records from multiple sources, saving you hours of manual reconciliation. If you’re doing it manually, create a master spreadsheet and consolidate all transactions chronologically.

Missing even one exchange can throw off your calculations, so be thorough.

Tracking DeFi, Staking, and Wallet Transactions

DeFi and non-custodial wallets add another layer of complexity. Unlike centralised exchanges, wallets like MetaMask or Trust Wallet don’t always provide neat transaction summaries. You’re interacting directly with the blockchain, and that means you need to track activity yourself.

For DeFi transactions, swaps on Uniswap, liquidity provision on Aave, yield farming, etc., you’ll need to pull transaction data from the blockchain. Tools like Etherscan (for Ethereum) or BscScan (for Binance Smart Chain) let you view your wallet’s transaction history by entering your public address. Export these records and note the date, value, and purpose of each transaction.

Staking rewards also require careful tracking. When you earn staking rewards, record the date, amount, and GBP value at receipt. Many staking platforms provide this info, but if you’re staking independently, you’ll need to cross-reference blockchain explorers and historical price data.

Portfolio-tracking tools like CoinTracker, Koinly, or Recap can sync with wallets and DeFi protocols, automatically importing and categorising transactions. This can save you from manually combing through hundreds of blockchain entries.

The bottom line: DeFi and wallet activity is taxable and reportable, so don’t assume it flies under the radar.

Calculating Your Crypto Gains and Losses

Calculating gains and losses is where the rubber meets the road. Get this wrong, and you’ll either overpay or underpay, neither of which is ideal.

In the UK, HMRC mandates a specific method for working out your cost basis: Share Pooling. This approach aggregates the cost of all your holdings of a particular cryptocurrency into a single ‘pool’, then allocates costs proportionally when you dispose of any portion.

Here’s how it works:

1. Add up all acquisition costs for a given crypto (purchase price plus fees).
2. Track the total quantity you hold.
3. When you dispose of some, calculate the average cost per unit from the pool.
4. Subtract that cost from the disposal proceeds to find your gain or loss.

For example, say you bought 1 BTC at £20,000 and another 1 BTC at £30,000. Your pool contains 2 BTC with a total cost of £50,000, giving an average cost of £25,000 per BTC. If you sell 1 BTC for £35,000, your gain is £35,000 minus £25,000, or £10,000.

There are two exceptions to pooling: same-day rules and the 30-day ‘bed and breakfast’ rule. If you buy and sell the same crypto on the same day, those transactions are matched first. If you buy within 30 days after a sale, that purchase is matched to the sale before pooling kicks in. These rules prevent artificial loss creation.

It sounds complex, but once you understand the mechanics, it’s manageable, especially with software doing the heavy lifting.

Understanding Cost Basis and Accounting Methods

Cost basis is simply what you originally paid for your crypto, including any acquisition fees. This figure is crucial because it determines your taxable gain or loss when you dispose of the asset.

Unlike some countries that allow methods like FIFO (First In, First Out) or LIFO (Last In, First Out), the UK requires Share Pooling for crypto. You can’t choose a different method to optimise your tax bill. HMRC’s rules are non-negotiable.

When calculating your cost basis, remember to include:

• Purchase price in GBP (convert from USD or other currencies using the exchange rate on the transaction date)
• Exchange fees and transaction costs
• Network fees (gas fees, miner fees, etc.)

These costs reduce your taxable gain (or increase your loss), so don’t overlook them.

For income events like mining or staking, your cost basis for any crypto received is its fair market value at the time of receipt. If you later sell that crypto, you calculate CGT based on the difference between the disposal proceeds and that original receipt value.

Working Out Capital Gains and Income

Once you’ve got your cost basis sorted, working out your gains, losses, and income is a matter of summarising your transactions for the tax year (6 April to 5 April).

For Capital Gains:

1. List every disposal (sale, trade, spend, gift).
2. Calculate the gain or loss for each using Share Pooling.
3. Sum all gains and losses.
4. Subtract allowable losses (including any carried forward from previous years).
5. Deduct the £3,000 annual CGT allowance.
6. What’s left is your taxable gain.

If your total gains are below £3,000, you owe no CGT, but you may still need to report if your total disposal proceeds exceed four times the annual allowance (£12,000 for 2024/25).

For Income:

1. List all crypto received as income (mining, staking, salary, airdrops).
2. Convert the fair market value at receipt to GBP.
3. Add this to your other income for the year.
4. If the total exceeds your personal allowance (£12,570), you’ll owe Income Tax on the excess.

Keep gains and income separate, they’re taxed differently and reported in different sections of your tax return.

If you’ve made a loss, don’t ignore it. Losses can be carried forward indefinitely to offset future gains, reducing your tax bill down the line. Report them even if you don’t owe tax this year.

Choosing the Right Tools and Software

You could do everything manually. Armed with a spreadsheet, a calculator, and a pot of coffee, you could track, categorise, and calculate every transaction yourself. But unless you’ve only made a handful of trades, that’s a recipe for frustration and errors.

Automated crypto tax software can save you hours, days, even, and dramatically reduce the risk of mistakes. These tools import your transaction data, apply HMRC’s rules, and generate reports ready for your tax return.

Manual Spreadsheet Methods vs Automated Software

Manual spreadsheets work if you’ve got a low volume of transactions and plenty of time. You’ll need to:

• Log every transaction with date, type, amount, and GBP value.
• Track your pooled cost basis for each crypto.
• Calculate gains and losses for every disposal.
• Reconcile data across exchanges and wallets.
• Keep everything updated and error-free.

The upside? It’s free (aside from your time). The downside? It’s tedious, error-prone, and doesn’t scale. Miss a transaction or miscalculate a pool, and your entire return could be wrong.

Automated software handles the grunt work. You connect your exchanges and wallets (via API or CSV upload), and the software imports your transactions, categorises them, applies Share Pooling, and calculates your gains, losses, and income. Most platforms also generate HMRC-compliant reports, including the figures you need for your Self Assessment.

The trade-off is cost, software typically charges based on the number of transactions, ranging from free tiers for light users to several hundred pounds for high-volume traders. But for most people, the time saved and accuracy gained are well worth it.

If you’ve made more than a dozen trades, automated software is almost certainly the better choice.

Popular Crypto Tax Software Options

Several platforms cater specifically to UK taxpayers, with features designed to handle HMRC’s quirks like Share Pooling and same-day rules.

Koinly is one of the most popular. It supports over 600 exchanges and wallets, automatically imports transactions, and generates tax reports tailored to UK rules. The interface is user-friendly, and it handles DeFi, staking, and NFTs. Pricing starts free for up to a limited number of transactions, with paid plans scaling up.

Recap is another strong contender, particularly for UK users. It’s built with HMRC compliance in mind, supports a wide range of exchanges and DeFi protocols, and offers detailed gain/loss breakdowns. Recap also has a helpful support team if you get stuck.

Accointing (now part of Glassnode) offers portfolio tracking alongside tax reporting. It supports multiple countries, including the UK, and integrates with numerous platforms. The free tier is generous, making it a good option for newer investors.

Other options include CoinTracker and CryptoTaxCalculator, both of which support UK tax rules and offer robust import and reporting features.

Before committing, check which exchanges and wallets the software supports, read reviews, and test the free tier if available. The right tool depends on your transaction volume, platform usage, and budget.

Completing Your Tax Return with Crypto

Once you’ve calculated your gains, losses, and income, it’s time to report them to HMRC. From the 2024/25 tax year onwards, Self Assessment returns include a dedicated section for cryptoassets, making it clearer where and how to report.

You’ll file your return online using HMRC’s Self Assessment portal. The deadline is 31 January following the end of the tax year (so 31 January 2026 for the 2024/25 tax year). Miss it, and you’ll face automatic penalties.

Which Forms You Need to File

Your main form is the SA100 (the core Self Assessment return). Within this, you’ll complete:

• The cryptoasset section (new for 2024/25 onwards), where you report details of your crypto disposals and gains.
• SA108 (Capital Gains summary), if your total disposal proceeds exceed the reporting threshold or you’ve made taxable gains. Here you’ll enter your total gains, losses, and the amount of your annual allowance used.
• Box 17 (or the relevant income section) for any crypto received as income, mining, staking, or salary. This goes in the ‘Other income’ section of your SA100.

If you’ve only got crypto income and no gains, you may not need the SA108, but you’ll still report the income.

Make sure you’ve registered for Self Assessment if you haven’t already. HMRC requires registration by 5 October following the end of the tax year if you’re filing for the first time.

Most tax software can export the figures you need in a format that’s easy to copy into the HMRC portal. Double-check everything before submitting.

Common Mistakes to Avoid When Reporting

Reporting crypto taxes is straightforward once you know the rules, but certain mistakes crop up again and again.

Confusing income and gains. Mining and staking are income, not capital gains. Selling crypto is a capital gain, not income. Mixing these up means reporting in the wrong section and potentially paying the wrong amount.

Missing transactions. Every disposal counts. Forgetting a trade, a crypto-to-crypto swap, or a purchase you made with Bitcoin will throw off your calculations and could trigger penalties if HMRC investigates.

Ignoring fees. Exchange fees, network fees, and gas costs are part of your cost basis. Excluding them inflates your gains and increases your tax bill unnecessarily.

Failing to apply pooling rules correctly. Using FIFO or another method instead of Share Pooling is non-compliant. HMRC’s rules are specific, and software helps, but if you’re doing it manually, follow the guidance carefully.

Not reporting losses. Even if you made a loss and owe no tax, you should report it. Losses can offset future gains, saving you money later.

Leaving it to the last minute. Scrambling to gather records and calculate gains in January is stressful and increases the risk of errors. Start early, and you’ll have time to fix any issues.

Take your time, double-check your figures, and if in doubt, get help.

Maintaining Records and Preparing for Future Tax Years

Filing your tax return once is satisfying, but crypto taxes are a recurring obligation. Setting up a system for ongoing record-keeping means next year won’t be a mad dash to piece together missing data.

HMRC requires you to keep records for at least five years after the 31 January submission deadline. That means if you file for 2024/25 in January 2026, keep records until at least January 2031. Digital records are fine, just make sure they’re backed up securely.

Setting Up a System for Ongoing Record-Keeping

The best time to organise your records is now, not next January.

If you’re using automated software, link your accounts and set it to sync regularly. Many platforms update in real-time or daily, so your records stay current without manual input. Review your transactions monthly to catch any errors or missing data early.

If you’re managing records manually:

• Create a master spreadsheet with columns for date, transaction type, crypto, amount, GBP value, fees, and notes.
• Download transaction histories from exchanges and wallets at least quarterly.
• Store all records in a dedicated folder, backed up to cloud storage or an external drive.
• Note wallet addresses and DeFi activity as it happens, it’s much harder to reconstruct months later.

Consistency is key. A few minutes each month beats a frantic week in January.

Also, keep an eye on regulatory changes. HMRC periodically updates its guidance on crypto, and new rules or thresholds could affect how you report. Subscribe to updates from HMRC or crypto tax platforms to stay informed.

When to Consider Professional Tax Advice

For straightforward crypto activity, buying, holding, and occasionally selling on a major exchange, self-filing with software is usually enough. But certain situations call for professional help.

Consider consulting a qualified tax adviser or accountant if:

• You’ve got high transaction volumes. Hundreds or thousands of trades, especially across DeFi, can be complex to categorise and calculate.
• You’re unsure how to classify specific transactions. NFTs, wrapped tokens, liquidity pool tokens, and some DeFi activities don’t always fit neatly into HMRC’s guidance.
• You’ve made significant gains. If your tax bill runs into five figures, professional advice can help optimise (legally) and ensure you’re not overpaying.
• You’ve received crypto through employment or as a business. Crypto payments to limited companies, self-employed income, or employer share schemes may have additional reporting requirements.
• HMRC has contacted you. If you receive a query or investigation letter, professional representation is invaluable.

Look for accountants with crypto experience, generalist tax advisers may not be familiar with Share Pooling, DeFi, or the nuances of HMRC’s cryptoasset guidance. The fees are often worth it for peace of mind and accuracy.

Conclusion

Reporting crypto on your taxes doesn’t have to be a nightmare. With a clear understanding of what’s taxable, diligent record-keeping, and the right tools, you can file accurately and confidently, without the stress.

Start by identifying your taxable events: sales, trades, and spending trigger Capital Gains Tax, while mining, staking, and crypto income fall under Income Tax. Gather comprehensive records from every exchange, wallet, and DeFi platform you’ve used. Use HMRC’s Share Pooling method to calculate your gains and losses, and don’t overlook fees or forget to report losses.

Automated software can save you hours and reduce errors, especially if you’ve made more than a handful of transactions. When it’s time to file, complete the SA100, SA108, and the new crypto section with accurate figures, and submit by the deadline.

Maintain ongoing records throughout the year, back them up securely, and don’t hesitate to seek professional advice if your situation is complex. The effort you put in now pays off in compliance, lower stress, and potentially a smaller tax bill.

Crypto taxes are here to stay, but with the right approach, they’re entirely manageable. You’ve got this.

Frequently Asked Questions

How do I report crypto on taxes in the UK?

Report crypto through Self Assessment using form SA100, including the dedicated cryptoasset section and SA108 for Capital Gains. You’ll need to calculate gains using HMRC’s Share Pooling method and report any crypto income separately in the income section, filing by 31st January.

What crypto transactions are taxable in the UK?

Taxable events include selling crypto for fiat, trading one cryptocurrency for another, spending crypto on goods or services, and gifting crypto to non-spouses. Mining rewards, staking income, and crypto salary payments are also taxable as income under HMRC rules.

Do I need to pay tax on crypto if I’m just holding it?

No, simply holding cryptocurrency doesn’t trigger a taxable event. You could hold Bitcoin for decades without owing HMRC anything. Tax obligations only arise when you dispose of crypto through selling, trading, spending, or gifting it to someone other than your spouse.

What is the Share Pooling method for crypto taxes?

Share Pooling is HMRC’s required method for calculating crypto cost basis. It aggregates all acquisition costs for each cryptocurrency into a single pool, then allocates costs proportionally when you dispose. This creates an average cost per unit used to calculate your gains or losses.

Can I use crypto tax software for HMRC compliance?

Yes, automated crypto tax software like Koinly, Recap, or Accointing can import transactions from exchanges and wallets, apply HMRC’s Share Pooling rules, and generate compliant tax reports. These tools significantly reduce errors and save time compared to manual spreadsheet tracking for UK taxpayers.

How long must I keep records of crypto transactions?

HMRC requires you to maintain comprehensive crypto transaction records for at least five years after the 31st January submission deadline. Digital records are acceptable, provided they include transaction dates, amounts, GBP values, fees, and counterparty information, all securely backed up.