Cryptoassets such as Bitcoin, Ethereum and other digital assets have become increasingly popular. However, cryptoassets are not outside the UK tax system, and HMRC is placing greater focus on ensuring that taxable crypto income and gains are correctly reported.
For most individual investors, cryptoassets are generally subject to the existing UK tax rules rather than a separate “crypto tax”. Capital Gains Tax (CGT) may apply when you dispose of a cryptoasset, including when you sell it for cash, exchange it for another cryptoasset, or use it to purchase goods or services.
A common misconception is that exchanging one cryptocurrency for another is not taxable because no cash is received. In fact, swapping Bitcoin for Ethereum can constitute a taxable disposal.
Some cryptoasset activities may instead give rise to Income Tax, depending on the circumstances. This can include certain staking, mining or other crypto-related rewards.
New Crypto Reporting Rules
The UK’s Cryptoasset Reporting Framework (CARF) came into effect on 1 January 2026. Under these rules, cryptoasset service providers within scope must collect information about their customers and relevant cryptoasset transactions and report this information to HMRC.
The first reporting period covers transactions during 2026, with the first reports due to HMRC between 1 January and 31 May 2027.
This means that crypto activity is becoming increasingly visible to HMRC. Keeping accurate records is therefore essential, including purchase and disposal dates, transaction values, fees and details of transfers between wallets.
It is important to remember that moving cryptoassets between wallets that you beneficially own is generally not a taxable disposal. However, other transactions may have tax consequences, so each situation should be considered carefully.
If you have bought, sold, exchanged or received cryptoassets, reviewing your records now can help ensure that your tax position is correct and that any taxable income or gains are properly reported.
How We Can Help
At Not Just Bookkeeping and Not Only Tax , we can help you understand how the UK tax rules apply to your cryptoasset activities and ensure that your income and gains are correctly reported to HMRC.
If you have bought, sold, exchanged or received cryptoassets and are unsure about your tax position, feel free contact us today to book an appointment and make sure you are prepared for the increasing reporting requirements.