Recap believes in helping people understand and maximise their wealth whilst paying a defensible amount of tax.
Conceptually, that's straightforward. Look at it through the lens of traditional finance and then apply it to crypto, however, and it gets rather more interesting.
There is still plenty of noise around crypto: new tokens, DeFi, regulation, scams, market cycles and whatever is happening on-chain this week. It can make the subject feel as though it is still waiting to become properly established.
The numbers suggest otherwise.
The FCA found that 12% of UK adults own cryptoassets, equivalent to around 7 million people. Its 2025 research also suggests that holdings are becoming more substantial: the proportion holding £100 or less fell from 32% to 27%, while the proportions holding between £1,001 and £5,000 and between £5,001 and £10,000 both increased. Centralised exchanges are used by 73% of crypto users to acquire assets. FCA: Cryptoassets consumer research 2025
Then, on 27 August 2026, HMRC published its first official statistics on taxable cryptoasset gains. In 2024–25, 17,600 individuals reported CGT-liable cryptoasset disposals, generating £1.38 billion of gains. Of those, 240 reported gains of more than £1 million, accounting for £717 million of the total. HMRC: Capital Gains Tax statistics
Put those figures together and there is a striking delta: around 7 million people own crypto, while 17,600 individuals appear in HMRC's statistics for CGT-liable cryptoasset disposals. On a simple comparison, that's roughly one in 400.
It would be wrong to conclude that the other 399 are failing to pay tax. Many will not have disposed of assets, some will have gains below relevant thresholds, some will have made transactions that do not give rise to a CGT liability, and the two datasets are not designed to be directly matched.
But the scale of the difference raises an important question for the tax profession, “How much crypto activity is currently sitting outside our current visibility and our existing processes?”
The current counterpoint is all too often, “We don't have any crypto clients.”
With 7 million UK adults owning crypto, that increasingly looks less like a statement about the market and more like a question about visibility. Do firms know which of their clients own crypto, and are they asking the question consistently?
For the clients who are already reporting, there is then another question, “How comfortable are we with the disclosure?”
A common approach is that the client uses crypto tax software, produces a number and sends it to their accountant. The accountant uses that number in the return.
It may be efficient at this point, but it leaves some fairly obvious professional questions unanswered. Is the underlying data complete? Have exchanges and wallets been reconciled? Have transfers between a client's own wallets been identified? Have unusual transactions been investigated? Has the tax treatment been reviewed, or has the software simply produced a number that looks plausible?
Accountants do not need to become blockchain investigators, but most would accept that “The client gave us the number” is becoming increasingly difficult to regard as a complete methodology.
I feel HMRC's own Guidelines for Compliance (13), rearing its head. It makes clear that the taxpayer remains responsible for ensuring a return is correct and complete, including establishing the relevant facts, using appropriate sources of information and taking the steps a prudent and reasonable person would take. Where professional advice is required, the adviser should be competent for the task. HMRC: GfC13 — correct and complete returns
That doesn't mean every crypto return needs litigation-standard evidence or a forensic investigation. HMRC's approach is proportionate to the uncertainty, tax at stake and complexity involved.
It does however mean there needs to be a reasonable basis for the number.
Plausible isn't enough
This is where the distinction between plausible and defensible becomes important.
For a period of time, getting to a reasonable-looking number was enough of a challenge. Data was fragmented across exchanges and wallets, transactions could be difficult to interpret, and newer forms of activity could require judgement about how the tax rules applied.
Generic, non-jurisdiction-specific software made the calculation easier, but did not necessarily answer the fundamental questions to ensure defensibility in a more forensic climate: Is the data complete? What actually happened? Has the transaction been classified correctly? Can the reconciliation be evidenced? Why has a particular tax treatment been adopted?
Historically, it was therefore possible to arrive at an answer that looked plausible. The harder question was whether anyone could explain, six months or three years later, why that answer was reasonable, and would HMRC agree?
A defensible position is different. It says: here is what happened, here is the evidence, here is how we treated it, and here is why.
That is not a crypto-specific standard. It is simply good tax practice applied to a particularly difficult source of data.
The profession itself recognises the gap
HMRC's research with cryptoasset investors and industry participants is revealing.
Investors generally use their existing accountants for crypto tax reporting, but reported that accountants were not particularly knowledgeable about cryptoasset tax reporting, even though awareness and knowledge have improved. Investors with multiple assets and frequent transactions also reported difficulties applying the tax rules and concerns about the reliability and consistency of third-party software. HMRC: research with cryptoasset investors and industry participants
That is perhaps the most important part of the story.
The clients are already there. The software is already there. The accountants are already there, albeit many playing catch up.
What is still developing is the process that sits between the client's activity and the number that ultimately goes into the return.
CARF will increase the pressure
From 1 January 2026, reporting cryptoasset service providers in the UK have been required to collect information about users and transactions. The first reports covering 2026 activity are due to HMRC by 31 May 2027. HMRC: reporting cryptoasset user and transaction data
The OECD has already published the technical format and interpretative guidance needed to make CARF operational internationally, with the first exchanges of information expected in 2027. OECD: CARF technical standards and guidance
That means more information, greater visibility and more international exchange of data. It does not, however, mean that the tax answer becomes automatic.
CARF is not a tax calculator and it will not capture every transaction. Recent Chainalysis analysis, reported by Cointelegraph, suggests that a substantial amount of potentially taxable on-chain activity sits outside CARF's reporting perimeter. Chainalysis analysis reported by Cointelegraph
Regardless, someone still needs to establish what happened, reconcile the activity, distinguish transfers from disposals, understand the transaction and apply the tax rules.
Defensible does not mean certain. It means you can explain how you got there.
This is perhaps the most useful part of GfC13. HMRC does not say that a tax position is unacceptable simply because there is uncertainty. Its guidance expects taxpayers to establish the facts, consider the relevant law and guidance, take appropriate and proportionate steps, and adopt a view they have good reason to believe is, on balance, correct. Where significant uncertainty remains, the steps taken and the basis for the position should be recorded.
That is particularly relevant to crypto because there will continue to be transactions where professional judgement is required. The answer is not to pretend that uncertainty does not exist. It is to identify it, deal with it properly and retain the evidence.
For a tax director or partner, that is arguably the more useful way to think about crypto tax. The question is not whether the firm needs to know everything about crypto. It is whether the firm has a process that allows it to take reasonable responsibility for the tax position it is filing.
The signal is now difficult to ignore
The FCA is building a formal regulatory regime for cryptoasset activities under FSMA, with the new regime applying from 25 October 2027. FCA: cryptoasset regulated activities and the FCA Handbook
At the same time, the FCA says around 7 million UK adults own crypto. HMRC has now identified £1.38 billion of reported cryptoasset gains in a single tax year. CARF is bringing greater visibility and international information exchange.
None of this makes crypto simple.
It does make it increasingly difficult to treat it as someone else's problem.
From plausible to defensible
This is where we come back to the reason Recap exists.
Recap believes in helping people understand and maximise their wealth whilst paying a defensible amount of tax.
That does not mean paying the least tax possible. It means understanding what you own, understanding what happened, understanding the rules and making informed decisions about the consequences.
For crypto, that starts with the data. Is it complete? Can the transactions be reconciled? Can transfers be distinguished from disposals? Can the underlying activity be understood? Can the tax treatment be explained? And, if someone asks the question later, is there an evidential trail showing how the answer was reached?
That is a different proposition from simply producing a tax calculation. It is about turning complex crypto activity into a tax position that the taxpayer and their adviser can understand, explain and stand behind.
The technology matters because it makes that possible at scale. Professional judgement still matters because software cannot replace it.
The tax answer does not need to be certain.
It needs to be defensible.
