Updates to Crypto Tax Reporting

For those of you that still think crypto is outside HMRC’s reach, think again!

Whether you’re a casual trader, a long-term holder of crypto, or someone dabbling in NFTs, HMRC will increasingly be able to track you down.

Most people now realise that cryptoassets are taxable, but it’s not just when you sell tokens for cash. Swapping one cryptocurrency for another, say, trading Bitcoin for Ethereum, counts as a disposal, and if there’s a profit, it’s likely to be taxable.

Using crypto to buy a pizza, a new laptop, or even giving it away in some circumstances? That, too, could be a taxable event.

Tax returns are getting a crypto update

In fact soon there’ll be a specific section just for crypto activity on your self-assessment tax return.

You’ll need to disclose the type of tokens you hold, when you bought or received them, how many you’ve got, and their value in pounds at the time of the transaction.

That means no more guesswork. You’ll need proper records.

HMRC advises keeping digital wallet addresses, dates of transactions, and bank statements. And if HMRC decides to investigate? Well in certain circumstances, they can look back as far as 20 years.

Right now, crypto exchanges don’t automatically report your activity to HMRC. But that’s also changing.

From 2026, new global transparency rules are expected to come into play. These rules could force platforms to start handing over customer data to the tax authorities, including HMRC, similar to the way online marketplaces like eBay and Etsy now report their seller’s income.

So, if you’ve been quietly trading or earning in crypto, the window for staying under the radar is closing fast.

Mining, earning, and spending crypto? It All Counts

What about crypto mining? Well, that counts as income too and should be reported as such on your tax return.

And if you’re getting paid in cryptocurrency, you still need to account for income tax and National Insurance. In most cases, this should be taken care of through PAYE, but if it isn’t, the responsibility lies with you.

What’s more, even where income tax is accounted for, if you later sell that crypto at a profit, you could also be hit with a Capital Gains Tax bill.

HMRC is already taking action

Last year, HMRC sent letters to individuals they suspected of failing to report crypto-related income and gains with a 60-day deadline to reply.

If you’ve missed declaring income in previous tax years, there is a way to sort this out through HMRC’s disclosure facility. But be prepared, this could result in penalties and interest on unpaid tax, so if you do get a letter, it’s always best to get professional advice before you reply

The crypto world moves fast, but HMRC is catching up. Whether you’re a miner, trader, investor, or someone paid in crypto, you need to be compliant.

Next Steps

At ETC Tax, we make crypto tax compliance clear, simple, and stress-free. We understand how the rules apply, how to get your records in order, and how to protect yourself from unnecessary penalties.

If you think you might have something to declare or just want peace of mind, get in touch with us today.