The short version: Cryptocurrency is digital money that exists only online. Bitcoin is the most famous, but there are thousands of others. Unlike regular money, crypto isn’t controlled by any bank or government.
How is it taxed?
If you make a profit from selling crypto, you might owe Capital Gains Tax. The rules are similar to shares. You pay tax on gains above your annual CGT allowance.
If you earn crypto through mining, that’s treated as self employment income. You’ll pay Income Tax and National Insurance on its value (converted to pounds) and can deduct expenses like equipment and electricity.
Do I need to report it?
If you’ve made gains above your allowance or received crypto as income, you need to declare it on your Self Assessment tax return. HMRC is increasingly interested in crypto and has ways to find out what you’re up to.
Got crypto and not sure what you owe? We can help you work it out.
