For years, plenty of people treated crypto as something HMRC couldn’t see. That’s coming to an end.
From January 2026, UK crypto exchanges and wallet providers have to collect your personal details and a record of your transactions, ready to report to HMRC – part of an international effort the UK government expects to raise more than £300 million.
That data is soon to be operational in HMRC’s systems, and they’ll use it to track non-payers now.
If you’ve bought, sold, swapped or earned crypto, this matters to you, whether you’re an active trader or someone who bought some Bitcoin a few years ago and forgot about it.
The rules on how crypto is taxed haven’t changed. What’s changing is how much HMRC can see: the information it needs to check who’s declared their crypto and who hasn’t is now being gathered.
Read on to learn about how crypto is taxed, what you have to report and by when, and what to do if you’ve never declared crypto before – ideally before that data reaches HMRC.
The Two Taxes That Apply to Crypto
Before you can work out what to report, you need to know how crypto is taxed – and this is where most people go wrong, because there isn’t one crypto tax, there are two.
HMRC doesn’t treat crypto as money. It treats it as property, like shares or a second home. A tax charge only arises when something happens to it – either you dispose of it, which can introduce Capital Gains Tax, or you receive it as a form of income, which can introduce Income Tax.
Capital Gains Tax: Selling, Swapping, Spending and Gifting
Capital Gains Tax is the one that applies to most ordinary investors. You may owe it whenever you “dispose” of crypto, and disposal covers more than just cashing out. You dispose of crypto when you:
- Sell it for pounds or any other ordinary currency.
- Swap it for another crypto – trading Bitcoin for Ether, say. This counts even though no cash changed hands, which surprises a lot of people.
- Spend it on goods or services.
- Give it away unless the gift is to your spouse, civil partner, or a charity (with caveats).
When you dispose of crypto, your gain is broadly its current value minus what you originally paid for it. For the 2025/26 tax year, everyone can make £3,000 of gains across all their assets before any Capital Gains Tax is due – this is the annual exempt amount. Above that, crypto gains are taxed at 18% where they fall within your basic-rate band, or 24% above it, depending on your income.
One wrinkle is worth knowing. HMRC requires you to “pool” each type of token to calculate its average cost, and applies special rules if you sell and rebuy the same token within 30 days. It’s fiddly, and it’s one of the main reasons crypto gains are easy to mess up.
Income Tax: Mining, Staking, Airdrops and Being Paid in Crypto
Sometimes crypto counts as income instead, and then it’s Income Tax – and sometimes National Insurance – that applies, rather than Capital Gains Tax. This happens when you receive crypto as a form of earning, rather than buying it yourself. The main examples are:
- Being paid in crypto by an employer or for freelance work.
- Mining rewards.
- Staking and lending rewards.
- Airdrops you received in return for doing something, such as promoting a project.
You’re taxed on the pound value of the crypto on the day you received it. That value is added to the rest of your income for the year and taxed at the normal Income Tax rates.
The twist is, the crypto is now yours at the value you were taxed on, so if you later sell it for more, Capital Gains Tax applies to the increase since you received it. The same coins can therefore face both taxes at different moments – Income Tax when they land in your wallet, and Capital Gains Tax if you sell them at a profit later on.
What HMRC’s Crypto Clampdown Means for You
The new rules come from the Cryptoasset Reporting Framework, or CARF – an international system, built by the OECD, that more than 40 countries have signed up to. In the UK it took effect on 1 January 2026. From that date, qualifying UK crypto service providers – the trading platforms, brokers and wallet providers that fall within the rules – have to collect information about their users and be ready to report it to HMRC.
There are three main points to be aware of:
- The data is being collected now, but HMRC doesn’t have it yet: Providers started gathering it on 1 January 2026, but the first reports to HMRC aren’t due until 31 May 2027, covering the 2026 calendar year. So HMRC isn’t seeing your trades in real time today – the information is being compiled now and will be handed over next year.
- What HMRC receives is a summary, not every trade: Providers collect detailed transaction information, but what goes to HMRC is largely a summary – who you are, plus figures for your activity by type of crypto – rather than a line-by-line record of every transaction.
- You have to identify yourself to keep using the platforms: From January 2026 you must give your personal details – name, address, date of birth, tax residence and tax reference number – to every crypto provider you use, so they can report accurately. Refuse, and HMRC can fine you £300.
HMRC has been getting data from some exchanges since around 2021 – Coinbase, for instance, has shared details of UK customers holding £5,000 or more. What CARF changes is the scale and the reach.
From 2027, instead of occasional, patchy information, HMRC gets a structured annual feed it can check against your tax return, and it will share that data with tax authorities in other CARF countries. If your return and the feed don’t match, expect to hear from them.
Income Tax: Mining, Staking, Airdrops and Being Paid in Crypto
Sometimes crypto counts as income instead, and then it’s Income Tax – and possibly National Insurance – that applies, not Capital Gains Tax. This is the case when you receive crypto as a form of earning, rather than buying it. The main examples are:
- Being paid in crypto by an employer or for freelance work.
- Mining rewards.
- Staking and lending rewards.
- Airdrops you received in return for doing something, such as promoting a project.
Here, you’re taxed on the pound value of the crypto on the day you received it, at your normal Income Tax rate. If you then hold that crypto and sell it later, Capital Gains Tax can apply on top – but only on any rise in value since you received it, because you’ve already been taxed on the value at receipt.
So a single coin can be caught by both taxes at different points – Income Tax when it lands in your wallet, and Capital Gains Tax when you later sell it for more.
A Catch for Active Traders: Lending and Liquidity Pools
If you go beyond straightforward buying and selling – lending your crypto out or putting it into a liquidity pool on a DeFi platform – there’s a trap that catches people who don ‘t cash in the traditional sense.
Under the current rules, moving crypto into some lending arrangements or liquidity pools can count as a disposal in its own right, because you’re handing over your tokens in exchange for something else, such as a right to get them back or a pool token. That means you can trigger a Capital Gains Tax charge without ever selling for pounds, and without the cash in hand to pay it.
If that seems unjust, relief is on the way. In July 2026, the government announced a new “no gain, no loss” treatment for these arrangements, which will prevent them from being treated as disposals. But it doesn’t start until 6 April 2027 – so for the 2025/26 and 2026/27 tax years, the current rules still apply, and moving crypto into these arrangements can still create a tax bill.
What You Must Report, and the 31 January Deadline
Crypto is reported through Self Assessment, the annual tax return. You need to send one if any of these apply during the tax year:
- Your total gains – crypto and everything else – come to more than the £3,000 allowance.
- You earned crypto that’s taxable as income, from mining, staking, lending, a qualifying airdrop, or being paid in it (unless a job already taxed it through payroll).
- You already file a return, and your crypto sales came to more than £50,000 in total – even if your gains were under £3,000.
If none apply, you have nothing to report. If any do, you register for Self Assessment (if you’re not already in it), then enter your gains on the SA108 capital gains pages – which have a dedicated crypto section from 2024/25 – and any crypto income on the income pages.
The deadline is 31 January after the tax year ends. For 2025/26, which ended on 5 April 2026, that’s 31 January 2027 – the date to both report and pay by.
One thing worth doing before any of that: get your records straight. For every transaction, you need the date, what you did, the value in pounds at the time, and any fees.
Reporting Gains Without a Full Return
If Self Assessment isn’t otherwise required of you, there’s a simpler route for gains. HMRC lets you report crypto gains through its real-time Capital Gains Tax service, without registering for a full return.
It’s worth knowing this only covers gains, though – if you also have crypto income to declare, the Self Assessment return is still the route, so it’s usually simpler to handle everything there in one go.
Owe Tax From Past Years? Use HMRC’s Disclosure Service
If you’re reading this with a growing sense that you’ve made crypto gains in the past and never declared them, the thing that matters is acting before HMRC contacts you – because with the new data coming, it’s a question of when, not if.
HMRC has a dedicated service for exactly this, called “Tell HMRC about unpaid tax on cryptoassets”. It lets you come forward voluntarily and put things right. How far back you have to go depends on why the tax wasn’t paid:
- If you took reasonable care but still got it wrong, you disclose the last 4 years.
- If you were careless, it’s the last 6 years.
- If you deliberately didn’t pay, it’s up to 20 years.
You’ll need to work out the tax, interest and penalties, and pay within 30 days of making the disclosure. Penalties depend on your behaviour and how much you cooperate, and they can reach 100% of the tax owed – but coming forward voluntarily almost always leaves you far better off than waiting for HMRC to find the gap.
Had a Letter From HMRC? Don’t Ignore It
HMRC has been sending out “nudge letters” – letters, and sometimes emails or texts – to people it believes hold crypto, asking them to check whether they owe tax. If one arrives, don’t panic, but don’t ignore it either.
A nudge letter doesn’t mean HMRC has opened an investigation or decided you owe anything.
Go back through your transactions properly, work out whether there’s any tax to pay, and answer based on the actual figures. If it turns out you do owe something, the disclosure service above is how you deal with it.
What to Do Now About Crypto Tax
Whether or not you’ve heard from HMRC, here are a few steps to put you on the front foot:
- Gather your records from every exchange and wallet you’ve used, going back as far as you can.
- Work out your position for each tax year – what you disposed of, what you earned, and whether any tax is due.
- Report the current year through Self Assessment by 31 January, and register for it now if you’re not already in the system.
- Deal with past years through HMRC’s disclosure service if you find you’ve underpaid.
- Get help if it’s complicated – multiple platforms, DeFi, staking and hundreds of transactions are genuinely hard to reconcile alone.
How Double Point Can Help
At Double Point, we help people get their crypto tax right and avoid nasty issues down the line.
We’ll reconcile your transactions across all platforms, separate what’s taxable as a gain from what’s taxable as income, calculate exactly what you owe, and report it correctly on your Self Assessment return. If you’ve underpaid in earlier years, we’ll handle the disclosure to HMRC and ensure it’s done in a way that keeps penalties as low as possible.
The data is being collected now, and it will reach HMRC from 2027 – so the safest position is a straight one. If you hold crypto and you’re not sure where you stand, book a free consultation, and we’ll help you sort it out before HMRC comes knocking.
Disclaimer: General information only, not advice. Rules and numbers can change. Take advice on your own circumstances before acting.