Crypto Tax in the UK: What HMRC Now Sees and What You Owe

If you have ever swapped one token for another, you have already made a disposal for Capital Gains Tax — even though no pounds ever reached your bank account. Gains above the £3,000 annual exempt amount are taxed at 18% or 24% in 2026/27, and rewards from staking, mining and some airdrops are taxed as income at your normal rate before you have sold anything at all. None of that is new. What is new is that HMRC no longer has to take your word for it. From 1 January 2026, UK cryptoasset service providers must collect your name, date of birth, address and tax reference number, and the first reports reach HMRC between 1 January and 31 May 2027.

What actually changed: HMRC now gets the data

The tax treatment of cryptoassets has not moved. The enforcement position has. Under the Cryptoasset Reporting Framework, UK cryptoasset service providers must collect identifying information about their users and details of their transactions from 1 January 2026, and then hand it to HMRC. Providers submit their first report between 1 January and 31 May 2027, covering the 2026 calendar year, and by 31 May every year after that for the previous calendar year. They also have to register with HMRC's online service by 31 January 2027 and tell you that your details are being reported.

What they collect from you is specific: your full name, date of birth, home address, country of residence and your tax identification number, which for a UK resident is your National Insurance number or your Unique Taxpayer Reference. For each transaction they record the value, the type of cryptoasset, the type of transaction and the number of units. If you give inaccurate details or refuse to give them at all to a UK provider, you can be charged a penalty of up to £300, and GOV.UK warns that the penalty can be higher where the provider is outside the UK.

Read that in plain terms. For the 2026 calendar year onwards, HMRC will hold a list of the people who hold accounts with reporting exchanges and what moved through them. It can compare that list against who filed a return with a gain on it. If you have been rolling gains from coin to coin for years on the assumption that nothing is due until you cash out, that assumption was never right, and it is now considerably harder to sustain.

Income or capital gain? Where HMRC draws the line

Two different taxes can apply to the same wallet, and people routinely pay the wrong one. The short version: receiving tokens can be income, getting rid of tokens is a capital disposal. For most private investors, HMRC treats buying and selling tokens as investment activity, so Capital Gains Tax applies. Only in genuinely exceptional cases — the level of organisation, frequency and commerciality of a business — does HMRC treat an individual as carrying on a trade in tokens, which would bring income tax and National Insurance instead.

The list of events HMRC treats as a disposal of cryptoassets is selling, exchanging for a different type of cryptoasset, using tokens to pay for goods or services, and giving them to another person. Moving your own coins between your own wallets is not on that list. Buying tokens with pounds is not on it either.

The trap: you never cashed out, and you still owe tax

This is the single most expensive misconception in UK crypto. People who have never sent a penny back to their bank account assume they have nothing to report. Every swap in the chain was a disposal, priced in sterling on the day it happened.

Marcus, 34, a higher rate taxpayer on a £62,000 salary. He bought 4 ETH for £8,000 including fees. Eighteen months later he swapped the lot for a different token when ETH was worth £3,450, so the sterling value of what he received was £13,800. He has not withdrawn anything and his bank balance is unchanged.

• Proceeds (sterling value of the tokens received): £13,800
• Less allowable cost of the ETH pool: £8,000
• Gain: £5,800
• Less the annual exempt amount: £3,000
• Taxable gain: £5,800 − £3,000 = £2,800
• Tax at 24% because his income already fills the basic rate band: £672

Marcus owes £672 by 31 January following the end of that tax year, and he has no sterling from the transaction to pay it with. That is the whole trap. If the new token then falls in value, the tax bill does not fall with it — the gain crystallised on the day of the swap. Run your own chain of swaps through the crypto tax calculator before you assume you are clear.

What you actually pay: rates, allowance and deadlines

Crypto gains are taxed at the ordinary asset rates, not the residential property rates. Your gain sits on top of your taxable income, so the part of the gain that falls inside your remaining basic rate band is taxed at 18% and everything above it at 24%.

Sources: GOV.UK Capital Gains Tax rates and GOV.UK Income Tax rates and Personal Allowances. If you want the wider picture on how the bands interact, see our guides on Capital Gains Tax rates for 2026/27 and UK income tax rates and bands, or model a single disposal in the capital gains tax calculator.

You can deduct transaction fees, the cost of advertising for a buyer or seller, the cost of drawing up a contract, the cost of a valuation needed to work out your gain, and a proportion of the pooled cost of your tokens. You cannot deduct the cost of mining equipment or the electricity to run it against a capital gain.

Report the gain on your self assessment tax return, which since the 2024/25 return has a dedicated cryptoasset section, and pay by 31 January after the end of the tax year. If you are not already in self assessment you can use HMRC's real time Capital Gains Tax service, which must be used by 31 December in the tax year after the sale. Note that the 60-day reporting window applies to UK residential property, not to tokens — crypto follows the normal self assessment timetable set out in our guide to self assessment deadlines and penalties. Miss the filing date and it is an immediate £100 penalty, then £10 a day after three months up to £900, then 5% of the tax due or £300 (whichever is greater) at six months and again at twelve.

Share pooling and the 30-day rule, applied to tokens

You do not track individual coins. HMRC makes you group each type of token into a pool and work out a pooled cost, so every Bitcoin you own sits in one Bitcoin pool with one average cost. When you dispose of some of them, you deduct the equivalent proportion of the pooled cost.

Two rules override the pool. Tokens of the same type bought on the same day as a disposal are matched against that disposal first. Then tokens of the same type bought within the 30 days after a disposal are matched next. Only what is left comes out of the pool. This is where people who sell to bank a loss get caught.

Nadia, 41, a higher rate taxpayer on a £70,000 salary. Earlier in the tax year she swapped a large ETH holding into a stablecoin and made a gain of £12,000. In December she is sitting on a token that has fallen, so she sells 24,000 units for £9,600 intending to harvest a £4,800 loss against that gain. Her pool held 60,000 units at a total cost of £36,000, so the average cost is £0.60 a unit and 24,000 units would carry £14,400 of cost. Five days later she buys 24,000 units back for £9,000 because she still believes in the project.

• What she expected: gain £12,000 − loss £4,800 = £7,200, less the £3,000 allowance = £4,200 taxable, tax at 24% = £1,008.
• What actually happens: the 24,000 units bought back within 30 days are matched against the December disposal instead of the pool. Proceeds £9,600 less the repurchase cost of £9,000 gives a gain of £600, not a loss at all.
• Her total gains become £12,000 + £600 = £12,600, less £3,000 = £9,600 taxable, tax at 24% = £2,304.
• The 30-day buy-back cost her £1,296. Her pool is untouched and still holds 60,000 units at £36,000.

Had she waited 31 days before buying back, the disposal would have come out of the pool at £14,400 of cost and the £4,800 loss would have been real. The same rule is why the bed and ISA technique exists for shares. If you have layered buys and sells over several years, work the matching through properly with the CGT share matching calculator rather than averaging by eye.

Staking, mining and airdrops

Tokens you receive from employment, mining, staking or lending count as income. You value them in sterling on the day you receive them, and that sterling value is both the amount you are taxed on now and the acquisition cost that goes into your pool for later. Miss the second half and you end up taxed twice on the same value when you eventually sell.

Where the activity does not amount to a trade, HMRC treats the tokens as miscellaneous income. Individuals have an allowance of up to £1,000 each tax year for trading and miscellaneous income. GOV.UK asks you to contact HMRC if your miscellaneous income is between £1,000 and £2,500, and to register for self assessment if it is over £2,500.

Tom, 27, a basic rate taxpayer earning £31,000. He receives staking rewards worth £2,400 across the year, valued in sterling on each reward date, and has no other miscellaneous income. He deducts the £1,000 allowance, leaving £1,400 taxable at 20%, so £280 of income tax. Because he is between £1,000 and £2,500, he contacts HMRC rather than assuming he must file. Those rewards also enter his token pool with a cost of £2,400, so if he later sells them for £3,100 the capital gain is £700, not £3,100. Our guide to the £1,000 trading allowance explains how the same allowance interacts with other side income.

Airdrops split in two. HMRC's cryptoassets manual says income tax will not always apply to airdropped tokens received in a personal capacity where you did nothing in return and the airdrop is not part of a trade or a mining business. But airdrops provided in return for, or in expectation of, a service are subject to income tax, either as miscellaneous income or as a receipt of an existing trade. Either way, disposing of an airdropped token can produce a chargeable gain.

The records HMRC expects

HMRC expects separate records for each pool. For every disposal you should be able to show the type of tokens, the date you disposed of them, the number of tokens, the value in pound sterling, bank statements and wallet addresses, and the pooled cost before and after the disposal. That is the standard you will be held to, and reconstructing it three years later from a dead exchange is close to impossible.

Practical points that save real money:

• Record the sterling value at the moment of every swap, not just every sale. A swap with no sterling leg still needs a sterling number.
• Keep the fee data. Transaction fees are allowable costs and they add up over hundreds of trades.
• Keep a note of transfers between your own wallets so you can prove they were not disposals.
• Download annual statements from every platform each January, including ones you no longer use.

If you are behind: how to make a voluntary disclosure

If you have gains or income from earlier years that you never reported, there is a dedicated route. HMRC's Tell HMRC about unpaid tax on cryptoassets service takes a disclosure covering unpaid tax, penalties and interest. How many years you have to go back depends on why the tax went unpaid.

Once you submit, HMRC issues a payment reference number beginning with X and you must pay the full amount you owe within 30 days of making the disclosure. If the thirtieth day is a weekend or bank holiday, the money has to clear by the end of the previous working day. If you cannot pay it all at once, contact HMRC before the deadline rather than after it. To see what late filing and late payment charges could look like on top, run the numbers through the self assessment penalty calculator.

What to do this week

• Export the complete transaction history from every exchange and wallet you have used, and store it off-platform.
• List every crypto-to-crypto swap, every purchase paid for in tokens and every gift you made. These are disposals whether or not you cashed out.
• Value each one in sterling on the day it happened, and build one pool per token type.
• Check whether staking, mining or service-linked airdrop income took you over the £1,000 allowance.
• If earlier years are wrong, use the disclosure service before HMRC uses the exchange data it starts receiving in 2027.

Getting this right is mostly bookkeeping. Getting it wrong is expensive, and from the 2026 calendar year onwards it is much more visible.