HMRC Crypto Reporting: What You Need to Know

HMRC has made it clear that cryptocurrency is firmly within its sights. Since 2024, major crypto exchanges including Coinbase, Binance, and Kraken have been required to share UK customer data with HMRC under the Crypto-Asset Reporting Framework (CARF). If you are trading crypto and not reporting it, the chances of being caught have increased dramatically.

Do you need to report?

You must report to HMRC if your total disposal proceeds from crypto exceed four times the Capital Gains Tax annual exempt amount in a tax year. For 2025/26, that means disposals exceeding £12,000. You must also report if you have a net capital gain above the £3,000 allowance. Even if you made a loss, you should report it to carry the loss forward for future use. If you received crypto as income — mining rewards, staking rewards, airdrops, or payment for services — you must report this as income regardless of the amount.

What counts as income vs capital gains

Capital gains apply when you dispose of crypto you held as an investment. Income tax applies when you receive crypto as compensation, mine it, earn staking rewards, or receive airdrops. The distinction matters because they are taxed differently and reported in different sections of the Self Assessment return. Income is taxed at your marginal rate (20%, 40%, or 45%), while capital gains are taxed at 18% or 24%.

The Self Assessment process

Crypto gains and losses are reported on the Self Assessment tax return, specifically in the Capital Gains supplementary pages (SA108). You need to provide: total disposal proceeds, allowable costs, total gains before and after losses, and the amount of annual exempt amount used. For large volumes of transactions, you can submit a summary and keep detailed calculations in your records.

Record-keeping requirements

HMRC expects you to maintain records of every crypto transaction for at least one year after the Self Assessment filing deadline (so effectively about 22 months after the end of the tax year). Records should include the date of each transaction, the number of tokens involved, the value in GBP at the time, the running total of the share pool for each token, bank statements showing fiat deposits and withdrawals, and wallet addresses used.

Deadlines and penalties

The tax year runs from 6 April to 5 April. Paper returns are due by 31 October following the tax year end. Online returns are due by 31 January. Late filing incurs an immediate £100 penalty, rising to £10/day after three months, then 5% of tax owed at six and twelve months. Interest is charged from the payment deadline. Deliberately failing to report can result in penalties of up to 100% of the tax owed, and in extreme cases, criminal prosecution.

HMRC's increasing capabilities

HMRC has invested heavily in blockchain analytics tools and data-sharing agreements. They can trace transactions across wallets, match exchange data to individuals, and identify patterns of non-compliance. The "nudge letter" campaign — where HMRC writes to suspected non-reporters — has been running since 2021 and is expanding. Making a voluntary disclosure before HMRC contacts you results in significantly lower penalties than being caught.

Voluntary disclosure

If you have unreported crypto gains from previous years, the best course of action is to make a voluntary disclosure. HMRC offers reduced penalties for those who come forward before an investigation begins. The process involves calculating your liability for all affected years, paying the tax owed plus interest, and a reduced penalty (typically 10–30% of the tax owed rather than up to 100%).

Don't leave your HMRC reporting to guesswork. CryptoLens calculates your UK crypto tax liability automatically, applying proper share-pooling rules, the 30-day rule, and current CGT rates. Export a complete tax report ready for your Self Assessment.