Crypto tax calculator – TaxScouts (2024)

File a crypto tax return

Why do I owe tax on crypto?

For a long time, crypto trading, mining and other related activity was a grey area for HMRC. There was no specific regulation related to cryptocurrencies. But as prominence in these profits grew, HMRC had to catch up. They published their first cryptoasset manual in March 2021, which gave specific guidance for the taxes owed on different crypto trading activities.

Why? Because no money is free money.

If you earn more than a certain amount in untaxed income, you’re legally bound to hand some of it over to HMRC. Rubbish!

How much tax do I pay on crypto?

It depends.

If you earn money from exchanging (trading or selling) coins and tokens, you might owe Capital Gains Tax. If you earn money from staking or mining crypto, you’ll be liable to pay Income Tax on these profits, depending on what you make overall in a year.

What is Capital Gains Tax?

We’re glad you asked!

Capital Gains Tax is the tax you owe on profits. You pay it when you sell an asset (e.g. a luxury car, jewellery, a house etc.). For the 2024/25 tax year, you pay CGT at the following rates:

• 10% (18% for residential property) for your entire capital gain if your overall annual income is below £50,270
• 20% (24% for residential property) for your entire capital gain if your overall annual income is above the £50,270 threshold

When it comes to crypto, you can earn up to £3,000 tax-free per tax year (previously £6,000) before you have to pay Capital Gains Tax.

When do I pay the tax I owe?

If you owe tax on your crypto profits, you should get the tax return deadline into your diary. You have to file and pay your tax bill on 31st January, the tax year after you started earning from crypto activity. Never filed a tax return before?

Then, the time to learn is now!

First things first, you’ll need to let HMRC know that you’re earning untaxed income. You do this via a process that’s called Self Assessment. You basically just tell HMRC (via online form) the type of income you’re earning and when you started operating.

They will then send you a Unique Taxpayer Reference number (UTR) in the post, which you’ll use to file your tax return.

How can I reduce the tax I pay?

If you’re earning money from trading crypto, unfortunately you’re not allowed to deduct your business spending from your profits. But if you’re staking or mining, you can. You’re allowed to deduct anything that you use wholly, exclusively and necessarily for your business e.g. mining rigs. Read more about how expenses work.

Something else to make use of if you’re staking or mining crypto is the Trading Allowance. You can earn up to £1,000 in untaxed income per year. You’ll see it applied to your calculation when you use our calculator.

Getting crypto tax advice

If you want tax advice on your crypto situation, speak to one of our accredited accountants. Book a 30 minute, 1-1 consultation to better understand your position as a crypto investor.

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