Cryptocurrency has taken the world by storm, however with its rise in popularity, tax authorities are also keeping a close eye on crypto activity. For UK crypto investors, understanding the tax implications of crypto income and capital gains is crucial to stay compliant.
In this article, we delve into the essential aspects of UK income tax rates and capital gains tax rates for the 2022-23 financial year, which is now open for filing. Find out what tax you need to pay on your crypto, the UK tax deadlines for filing your 2022-23 tax return as well as how to calculate what you owe and the tools you can use to help.
This article will be updated annually with the latest information on UK crypto tax rates and deadlines, making it a valuable resource for each tax year.
UK crypto tax rates 2022/23
In the UK crypto activity can be subject to capital gains and income tax, which are taxed at different rates depending on your total annual earnings. Generally capital gains applies when you earn profit (or make a loss) from disposing of a crypto asset, such as selling, trading, gifting, or using it for purchases. When earning crypto, for example mining, staking and lending rewards, it’s likely you’ll need to pay income tax.
For a comprehensive overview, refer to our UK Crypto Tax Guide.
UK capital gains tax rates for crypto 2022/23
HMRC is clear that capital gains tax applies to crypto whenever you dispose of an asset. A disposal can include:
- Selling crypto for fiat (cashing out)
- Exchanging one crypto asset for another (for example trading Bitcoin for Ethereum)
- Gifting crypto (with some exceptions)
- Purchasing goods or services using crypto
Capital gains allowance
When your total capital gains (for crypto and other property) exceeds the annual capital gains allowance you will need to pay tax. For the 2022/23 tax year this threshold is £12,300. So if you made gains over this amount you will need to pay tax.
The rate of tax you pay depends on your total taxable earnings, which typically includes your annual salary, other income, and capital gains.
Capital gains tax rate 2022/23
|Capital Gains Tax Rate
|£12,300 to £50,270
When the taxable earnings is below £50,270, the CGT rate is 10%, where the taxable earnings is more than £50,270, the CGT rate is 20%.
So, if you’re a higher rate tax payer you’ll pay:
- 0% on gains up to £12,300 then
- 10% tax on gains up to £50,270 and
- 20% on gains over £50,270.
While it's not possible to avoid paying tax, there are strategies to reduce capital gains tax during the tax year:
- Keeping gains within the capital gains allowance by making carefully considered disposals
- Transferring crypto assets to your spouse/civil partner to utilise their capital gains allowance
- Donating crypto to a selected registered charity, CASC or body
For more detailed information and tax optimisation strategies take a look at our article Can You Avoid Paying Tax on Crypto in the UK?
UK income tax rates for crypto 2022/23
The UK follows a progressive tax system meaning that the more income you make, the higher tax you pay. Your income tax rate depends on your overall income level and other types of income in the year.
Income tax rates 2022/23
|Up to £12,570
|£12,571 - £50,270
|£50,271 - £150,000
You do not pay a flat rate of tax on all of your income; your tax rate increases as your income climbs up the brackets.
- Income up to £12,750 is tax free, then
- income between £12,571 - £50,270 is taxed at 20%, then
- income between £50,270 - £150,000 is taxed at 40%, and finally
- income over £150,000 is taxed at 45%
* The Personal Allowance goes down by £1 for every £2 that your adjusted net income is above £100,000.
Scottish income tax brackets
In Scotland, income from crypto is treated the same, however it’s important to be aware of some slight differences in the Scottish income tax brackets.
Scottish income tax rates 2022/23
|Up to £12,570
|£12,571 - £14,732
|£14,733 - £25,688
|£25,689 to £43,662
|£43,663 - £150,000
How to calculate crypto taxes in the UK
Before you can calculate how much crypto tax you owe you’ll need to work out your net capital gain and net income from crypto. Once you have established these figures you can find the relevant tax bracket and estimate how much tax is payable. Below we explain how to calculate your capital gains and income from cryptocurrency.
Calculating your crypto capital gains
To calculate your total capital gains you’ll need to work out the gain or loss for each individual disposal within the tax year. To calculate the gain/loss, subtract the allowable costs from the disposals proceeds.
Calculating your crypto income
To calculate your income from cryptocurrency you’ll need to identify the sterling value of your crypto income at the time of receipt for each transaction and then total this together, deducting any allowable expenses.
To quickly estimate your capital gains tax from crypto, get started with our crypto tax software.
UK Tax Deadlines for the 2022/23 financial year
The UK 2022/23 tax year ran from 6th April 2022 to 5th April 2023. If you have any capital gains or income that is subject to tax from this period, you’ll need to file your self assessment tax return and pay any taxes due by 31st January 2024.
Here’s a list of the key dates to be aware of for filing your 2022/23 crypto taxes in the UK:
6th April 2022: Start of the 2022/23 financial tax year.
5th April 2023: End of the 2022/23 financial tax year.
(6th April 2023: Start of the 2023/24 financial tax year.)
5th October 2023: Self Assessment Tax Return registration deadline
Midnight, 31st October 2023: Deadline for submitting paper Self Assessment Tax Return by post.
30th December 2023: Deadline for submitting online Self Assessment to pay through your PAYE tax code (where available - conditions must be met)
Midnight, 31st January 2024: Deadline for filing and paying Self Assessment Tax Return online
How to file your crypto taxes to HMRC
Once you have calculated your capital gains and income from crypto you can report to HMRC. In the UK, there are various ways to file and pay your crypto taxes, most individuals choose the online Self Assessment Tax Return but let's explore the options available to you…
Capital gains tax real time service
If you only need to report and pay capital gains tax on your crypto you could use the government’s Capital Gains Tax real time service to report it straight away. Access to this is through the Government Gateway using your user ID and password.
Once you have reported your gains HMRC will send you a letter or email giving you a payment reference number and you can pay via the online tax payment service or through online banking or cheque. You’ll need to report by 31st December in the tax year after you made your gain and pay by 31st January.
This is a great service for crypto investors who make a small number of disposals to proactively manage their taxes throughout the year, however Self Assessment is likely to be more efficient for investors with large volumes of transactions.
Self assessment tax return
Filing a Self Assessment Tax Return is the most popular method for reporting crypto taxes to HMRC, especially because many UK individuals with crypto are self employed and already filing this way. Your Self Assessment Tax Return can be filed online or by posting a completed paper form to HMRC.
Once you have calculated your capital gains and income they can be reported on the tax return. Capital gains from crypto should be combined with gains from other sources, such as property, and reported on the SA100 and the Capital Gains Summary SA108. Taxable income from crypto should be reported as Miscellaneous Income in box 17 of the SA100, with allowable expenses in box 18.
If you are classed as a financial trader in crypto assets, then your activity will need to be reported as financial trading on the Self Employment pages of the tax return. (This is extremely rare and we recommend seeking the advice of a professional before filing).
File your tax return with an accountant
Alternatively, you could hire an accountant to file your crypto taxes for you. Although, they are not able to use the capital gains tax real time service they can file a Self Assessment Tax Return on your behalf. If you are unsure on your tax liability, then this option is great for giving you peace of mind!
The hardest part of filing your taxes as a crypto investor is keeping track of all your activity and calculating your capital gains and income. Recap makes this simple! Once you have connected your exchanges and wallets, our tax calculator identifies the taxable transactions, establishes fair market valuations for your assets and automatically calculates your capital gains and income, generating a crypto tax report with all of the information required to complete your Self Assessment Tax Return.
To get started and preview your capital gains for free, just hit the Get Started button!