Cryptocurrency
All there is to know about cryptocurrency
Do you know your bitcoin from your ethereum and your NFT’s from your metamask? We give you the crypto low-down and why it's important to engage a crypto accountant.
What is cryptocurrency?
Cryptoassets or cryptocurrency has surged in popularity in recent years. You have probably heard of Bitcoin, Ripple, Litecoin or Ethereum. The word crypto means “secret” or “hidden” refers to the secure technology used to guarantee who owns what and the ability to make payments. These currencies exist electronically, use a peer-to-peer system and isn’t regulated by a central bank or government… yet. The majority of cryptocurrencies, at the moment, are held by people who expect the value to rise.
HMRC and cryptocurrency
The tax treatment of cryptoassets continues to develop due to the evolving nature of the underlying technology and the areas in which cryptoassets are used. We expect HMRC’s approach and views on cryptocurrency will continue to evolve as the sector develops. We anticipate HMRC will publish amended or supplementary guidance as going forward.
Check with your WallsMan Creative accountant about the current tax status of cryptocurrency and other assets, such as NFT’s.
What tax is owed on cryptocurrency?
The tax you owe on cryptocurrency in the UK depends on how you receive and use it. If you mine or earn crypto (for example through mining, some forms of staking or running validator nodes) and HMRC treats this as a trade or self‑employment, the GBP value of your rewards will usually be subject to Income Tax and National Insurance. Reasonable expenses used wholly and exclusively for the activity – such as computer hardware, a proportion of broadband and electricity, specialist software, accountant fees and similar costs – can normally be offset against this income if you are operating on a commercial basis. You may be able to use the £1,000 trading allowance for very small amounts of miscellaneous or trading income, subject to HMRC’s normal rules.
If you are an individual who has made a profit from selling or otherwise disposing of cryptocurrency, you will usually pay Capital Gains Tax (CGT) on your gains above the annual CGT allowance. For the 2025/26 tax year, the CGT annual exempt amount for individuals is £3,000 and this applies to all your gains in the year – including crypto, shares and other chargeable assets – taken together. You’ll only pay tax on the part of your total net gains that exceeds this £3,000 threshold, after deducting any allowable capital losses.
You may have a CGT charge if you sell your tokens for fiat currency, exchange your tokens for a different cryptoasset, use your tokens to pay for goods or services, or give your tokens away to someone other than your spouse or civil partner. You do not pay CGT again on the value of tokens that has already been taxed as income when you received them, but you may pay CGT on any additional gain when you later dispose of those tokens.
What records should you keep for accounting crypto
Keep separate records for each transaction including:
- The type of tokens
- Date you disposed of them
- Number of tokens you’ve disposed of
- Number of tokens you have left
- Value of the tokens in £
- Bank statements and wallet addresses
- Records of the pooled costs before and after you disposed of them
Accountants who know their crypto from their elbow
The world of cryptocurrency is fast-evolving. UK tax regulations aren’t always fully understood by investors or crypto businesses.
The implication of this can be significant.
HMRC are increasingly active in monitoring cryptocurrency revenues. They have been clear in reminding those with crypto that pleading ignorance wont wash. It’s important to make sure you review your tax affairs with an experienced crypto accountant.
Get in touch with WallsMan Creative today to discuss your crypto activities, or if you are interested to learning more.
Frequently Asked Questions about cryptocurrency services
We provide crypto transaction tracking, tax reporting, capital gains and income calculation, HMRC-compliant records, and strategic advice tailored to creative professionals holding or trading digital assets.
Yes! Crypto transactions can trigger complex tax events (capital gains, income, staking/yield), and professional accounting ensures accurate reporting and minimises HMRC risk.
We prepare crypto tax reports compliant with HMRC requirements, detailing gains, losses, and taxable income for self-assessment.
We consolidate activity from multiple sources, normalise transaction data, identify cost bases, and calculate gains and losses across all accounts.
NFT purchases, sales, and royalties are treated as taxable events, and we record and classify them according to HMRC guidelines.
Costs vary with transaction volume and complexity; we provide clear fixed fees after reviewing your crypto profile and reporting needs. Your best bet is to contact us.