Tax on crypto in the UK (2026 update)

Approximately 4.6 million people in the UK now own cryptocurrency, representing around 8% of UK adults. For many, crypto now sits alongside traditional investments. With the introduction of a reporting framework earlier this year and HMRC cracking down on potential non-compliance, it’s more important than ever to make sure your crypto activity lines up with what you submit to HMRC when reporting any income or capital gains.

If you receive crypto through employment, mining, staking, lending or liquidity pool arrangements, it counts as income. You may need to pay income tax and national insurance contributions on the amount received, based on its market value (in GBP) at the date you received it.

If you buy crypto, you don’t need to pay tax at the time of purchase. Tax will be due when you dispose of it (if you make a gain).

If you dispose of crypto, any gain or loss is typically subject to capital gains tax. If you received it for free, the gain is calculated based on its market value at the point of disposal.

You can deduct certain costs from your gain, including transaction fees, fees paid to draw up contracts, costs of getting a professional valuation and reasonable costs incurred to find a buyer. You can also deduct capital losses made on other disposal events to reduce your overall gain (and minimise tax).

Each transaction needs to be recorded separately with the date, type of token, amount disposed of, amount remaining, and the value in GBP.

Disposal events that trigger CGT reporting include:

Transfers between wallets of the same type of crypto, gifting your crypto to a spouse or civil partner (provided you live together), or donating your crypto tokens to a registered UK charity do not trigger a taxable disposal.

To report and pay capital gains tax, you can either include it in your Self Assessment at the end of the tax year or use HMRC’s real-time service to report it right away. 

CGT is only due if your total taxable gains in a tax year exceed the annual tax-free allowance (for the 2026/27 year, this allowance is £3,000).

From 1 January 2026, the UK implemented the Cryptoasset Reporting Framework (CARF). This is an international standard developed by the OECD to create transparency across digital asset transactions. The UK is one of more than 40 countries that have now adopted this framework.

CARF creates a structured system that allows HMRC to see your transaction history automatically, rather than relying on self-reporting or information gathered through compliance checks.

The data collected covers 3 key types of activity:

Each transaction record includes the user's details, the date, the amount, the type of asset involved and the value in pounds. This data is then reported to HMRC from the exchange platforms.

The first reporting period runs from 1 January 2026 until 31 December 2026, with reports from cryptoasset exchanges to HMRC due by 31 May 2027.

Information will be exchanged between tax authorities in participating countries, so activity on foreign exchanges will also be reported back to HMRC for UK tax residents.

In July 2026, HMRC launched a campaign targeting wealthy taxpayers holding crypto and encouraging them to check they have reported their transactions correctly. This timing comes at a point when HMRC's data collection under CARF is now live and the authority can start comparing what it sees in the data against what has been reported in Self Assessment tax returns.

HMRC will cross-check the transaction information reported by crypto platforms against your Self Assessment tax return. If there are discrepancies, it will trigger further inquiry. This might be a simple letter asking you to verify your position, or it might be a more detailed review of your tax affairs.

Where HMRC identifies that you have failed to report gains, underreported gains or missed disposals entirely, adjustments will be made. Additional tax, interest and penalties may apply.

If you have held or traded crypto in previous years, now is the time to review your records and your tax returns. 

Specifically, you should do the following:

You can use tools (such as Koinly) to help you compile transaction histories. These platforms can sync with your exchange accounts and generate reports that make the records clearer to review.

Your accountant needs records of your transaction history so they can accurately calculate your tax position. Going forward, they’ll also be able to reconcile it against HMRC data to ensure your Self Assessment reflects the same picture.

The information you should provide your accountant after each tax year includes a ledger from each platform clearly showing:

If you have not kept detailed records or if your records are messy, now is the time to reconstruct them. This becomes harder the further you move away from the transactions. The sooner you work through your history, the sooner you can be confident your tax position is correct and you won’t face any potential issues in the future once data starts flowing through to HMRC.

If you are unsure how your crypto activity should be treated or whether your tax position is correct, an accountant who understands crypto can help you work through it and get everything into order.