Crypto transactions reporting in self-assessment

Crypto transactions reporting in self-assessment

Does your business use cryptocurrencies and non-fungible tokens (NFTs)?

Greater scrutiny is now on reporting all crypto transactions. HM Revenue & Customs (HMRC) confirmed from 2024-25 self-assessment tax return forms will feature a new segment to declare any gains from crypto assets for individuals and trusts. 

Greater security

The heightened scrutiny of crypto-asset holders becomes more of an issue for taxpayers resulting from the reduction in the tax-free Capital Gains Tax (CGT) Annual Exempt Amount.

After a turbulent year, interest seems to have renewed in digital currency after substantial problems in the traditional banking sector.

This saw the bailout of United States lenders Silvergate Bank, Silicon Valley Bank and Signature Bank, to be followed by Credit Suisse in Switzerland.

Crypto markets have bounced back in 2023, with a particular enthusiasm for AI crypto tokens and projects.

Tax relief

It is now crucial for investors to guarantee they are reporting their crypto correctly, to get their tax right or to take advantage of valuable tax relief on any losses.

Investing in, mining, creating, or actively trading crypto-assets means you are likely to be generating taxable income or gains.

The new requirements will allow HMRC to check annual tax reporting against data they receive directly, for example, from crypto exchanges and other trading platforms.

Crypto exchanges like Coinbase, Binance or Kraken have provided contact details of those trading in crypto assets for HMRC in recent years.

Disclose data

Under UK regulations, to have UK customers, these exchanges are expected to disclose user data to HMRC.

The rule change also affects crypto investors who have not accessed their crypto assets.

HMRC views crypto as situated where the holder is a resident, meaning that the remittance basis of taxation will generally not protect crypto gains or income.

Need advice with crypto-transactions reporting and completing your self-assessment? Contact us.