Crypto Tax: What UK Businesses and Investors Need to Know

Crypto is no longer “new”, it’s now a serious asset class used by investors, entrepreneurs, and forward-thinking businesses across the UK. From Bitcoin, Ethereum, and XRP to staking, DeFi, and token-based payments, crypto has become part of modern finance. HMRC recognises this too, which is why it has clarified and updated how crypto is taxed and reported.

The good news? Crypto is legal, investable, and fully supported in the UK as long as it’s reported correctly. This guide explains the latest HMRC crypto tax rules, rates and allowances, and how UK businesses and investors can stay compliant while continuing to benefit from crypto’s long-term potential.

HMRC Is Modernising Crypto Reporting (Not Banning It)

HMRC’s recent changes are not about discouraging crypto, they’re about bringing it into the mainstream tax system, just like shares or property.

From 1 January 2026, UK crypto exchanges and wallet providers must collect and report user data to HMRC under the OECD Crypto-Asset Reporting Framework (CARF). This includes transaction values, dates, and user identification details. The aim is transparency, consistency, and international alignment, not restriction.

For investors and businesses who already keep good records, this change is largely administrative. It simply means crypto is now treated like any other recognised investment, with clearer rules and fewer grey areas. Crypto is just one part of the wider UK tax system, and understanding how it fits alongside income tax, capital gains, and allowances is essential.

How Crypto Is Taxed in the UK

HMRC does not treat crypto as gambling or currency. Instead, it is classed as a capital asset, similar to shares.

Capital Gains Tax (CGT) on Crypto

A CGT event happens when you:

• Sell crypto for cash

• Swap one cryptocurrency for another

• Spend crypto on goods or services

• Gift crypto (except to a spouse or civil partner)

CGT Rates and Allowances (2025/26 onwards)

• Annual CGT allowance: £3,000

• CGT rate for basic-rate taxpayers: 18%

• CGT rate for higher and additional-rate taxpayers: 24%

Because the allowance has reduced significantly in recent years, more crypto investors now need to report gains, even on relatively modest portfolios.

When Crypto Is Taxed as Income

Crypto received through active involvement is usually taxed as income rather than a capital gain. This includes:

• Mining rewards

• Staking rewards

• Airdrops received in return for actions or services

• Payments in crypto for work or business activity

These amounts are taxed at standard Income Tax rates:

• 20% basic rate

• 40% higher rate

• 45% additional rate

The personal allowance remains £12,570, after which income tax applies. For companies, crypto income is subject to Corporation Tax.

How Businesses Can Use Crypto to Grow Excess Profits

For UK businesses with surplus cash, crypto and digital assets are increasingly being used as a strategic investment rather than pure speculation. Limited companies can invest in crypto where permitted by their articles, and any holdings are treated as company investments rather than personal income. Profits on disposal are subject to Corporation Tax (currently 19% to 25%, depending on profits), which can be more tax-efficient than personal tax rates in certain situations.

From a balance sheet perspective, crypto can help diversify assets and support long-term growth when excess profits are not needed for day-to-day operations. Crypto is usually recorded at cost and taxed only when sold, allowing companies to hold assets without triggering immediate tax charges. However, volatility, accounting treatment, and cash flow requirements must be carefully considered. We help businesses decide whether crypto is suitable, structure investments correctly, and ensure everything is accounted for in a compliant, commercially sensible way.

Reporting Crypto to HMRC

If your crypto gains exceed the £3,000 CGT allowance, they must be reported via a Self Assessment tax return. HMRC has added specific crypto sections to tax returns, making disclosure straightforward for those with proper records.

You should keep:

• Transaction dates

• GBP values at the time of each transaction

• Wallet and exchange records

• Fees paid

• Crypto received and disposed of

Good record-keeping gives you control, accuracy, and peace of mind, and often results in lower tax bills through correct loss offsetting. To make this manageable, specialist crypto accounting software that connects to exchanges and wallets, accurately tracks transactions, and calculates gains and losses in line with HMRC rules removes the risk of manual errors, ensures full compliance, and gives clear, reliable figures you can trust.

Why This Matters for UK Businesses and Investors

Crypto can be a valuable tool for diversification and long-term growth for both businesses and individuals, but its true value is realised only when the tax position is handled correctly. Whether you are a limited company holding crypto as an investment, a sole trader accepting crypto as payment, a partnership investing surplus funds, or an individual planning for long-term growth, understanding the rules allows you to invest with confidence rather than uncertainty. With the right structure and advice in place, crypto can be used strategically without creating unexpected tax or compliance issues.

How We Help You With Crypto Tax

At LT Accounting, we are crypto-positive and compliance-focused. We work with UK businesses and investors who want to benefit from crypto without unnecessary tax risk.

We help by reviewing your crypto activity, correctly separating income from capital gains, calculating gains using HMRC’s pooling rules, preparing accurate Self Assessment or Corporation Tax returns, and advising on tax-efficient planning. If records are incomplete, we can help reconstruct them properly. Most importantly, we explain everything clearly, no jargon, no scare tactics, just straightforward advice that supports your goals.

Final Thoughts: Crypto Is Here to Stay — Make Tax Work for You

Crypto is no longer on the fringe. It’s part of modern investing, business strategy, and financial planning. HMRC’s updated approach reflects that reality.

If you want to invest in crypto, grow your portfolio, or already hold digital assets, the smartest move is to ensure your tax position is accurate, efficient, and future-proof.

Get in touch with LT Accounting today to discuss your crypto investments and make sure your tax works with you, not against you.