If you're a crypto enthusiast in the UK and the 2022/23 tax year has you considering filing a tax return for the first time, you're in the right place! Before you’re able to file your taxes you must register for Self Assessment with HMRC by the 5th of October.
In this article, we'll explain who needs to file a tax return, who needs to register for Self Assessment and provide you with a step-by-step guide on how to do so.
Who needs to file a tax return?
Before diving into the registration process, let's first establish whether you need to file a tax return for the 2022/23 tax year. The 22/23 tax year covered the period from 6th April 2022 to 5th April 2023. You must send a tax return if any of the following criteria apply to you (note - we’re covering things outside of crypto here too):
- You were self-employed as a 'sole trader' and earned more than £1,000 (before tax relief).
- You were a partner in a business partnership.
- Your total taxable income exceeded £100,000.
- You had to pay the High Income Child Benefit Charge.
- You received untaxed income from sources like renting out a property, tips, commission, savings, investments, dividends, or foreign income.
As a crypto investor, it’s likely that final bullet applies to you. It's essential to file a tax return if your capital gains exceeded the annual allowance, which was £12,300 for the 2022/23 tax year, or if your disposal proceeds exceeded four times the allowance. If you received more than £1,000 Miscellaneous income from crypto during the 2022/23 tax year then this also needs to be reported and paid.
Who needs to register for Self Assessment?
UK Individuals Filing a Tax Return for the First Time
If you're a first-time tax filer for the 2022/23 tax year, you must register for Self Assessment by 5th October 2023. Registering early ensures you have ample time to complete your tax return accurately.
UK Individuals Who Have Previously Filed a Tax Return
If you filed a tax return last year, there's no need to register again – that's one less task on your to-do list! However, if you have filed previously but didn't file last year, you'll need to re-activate your account by signing in to the government gateway.
How to register for Self Assessment
Let's move on to the registration process.
- Prepare Your Documents: Before you begin, gather essential documents such as your National Insurance number and any relevant income records, like payslips or bank statements. This will streamline the process and help you get registered more smoothly.
- Create a Government Gateway Account: Your government gateway account is your online portal for interacting with HMRC. Assuming you don’t already have a login, head to the Government Gateway login page and click "create sign in details" then enter your email address and follow the instructions to fill in all the required information to set up your account.
- Register for Self Assessment Using Form SA1: To register for Self Assessment, visit the HMRC website and fill in the SA1 form. You can submit the form in two ways:
- Online SA1 Submission: Fill in and send the form online by signing in with your government gateway ID and password.
- Paper SA1 Submission: Fill in the form, print it, and post it to the provided address.
What information is needed to register for Self Assessment?
When completing the SA1 form, you’ll be asked to provide the following details:
- Your full name
- Postal address (this can be outside the UK)
- Date of birth
- Daytime telephone number
- UK National Insurance number
- An explanation of why you need to register for Self Assessment and the date this began.
What happens after you've registered for Self Assessment?
Here's what to expect once you've registered for Self Assessment, including what you need to do next:
- Receive Your UTR: You'll receive a letter containing your Unique Taxpayer Reference (UTR) number by post within 15 days.
- Activate Your Account: Sign in to your personal tax account (that you created during registration) and use your UTR number to activate it.
- File Your Tax Return: You're now ready to file your tax return, and you can do this anytime before the tax deadline of 31st January.
If you need assistance with filing your tax return, be sure to check out our comprehensive guide "How to file your crypto taxes with HMRC".
Trading crypto and unsure about your tax obligations?
If you're uncertain about your tax obligations related to crypto trading, Recap can help! Simply create an account, connect your crypto exchanges and wallets, and Recap will automatically calculate your capital gains and income taxes and flag whether you need to file a tax report for the year. For a deeper dive into cryptocurrency taxes, explore our crypto tax guide.
Navigating the world of tax returns may seem daunting, especially for crypto enthusiasts, but with the right guidance and timely action, you can fulfill your tax obligations effortlessly!