5 Steps to File Your Cryptocurrency Taxes in the UK

Need to comply with the UK’s crypto tax rules but don’t know where to start? We’ve got you covered. Here’s a five-step guide to filing your cryptocurrency taxes in the UK. Follow these steps to heart for a hassle-free and seamless taxpaying experience.

1. Learn the crypto tax rules and prepare your crypto tax reports.

First up, educate yourself about the UK’s crypto tax guidelines. The Her Majesty’s Revenue and Customs (HMRC) released their tax guidance on cryptoassets on 19 December 2018. It has since been updated twice in November and December 2019, respectively. 

The tax guidelines will aid you in identifying your crypto transactions, gains, and losses from different activities such as:

  • Buying
  • Selling
  • Trading
  • Mining
  • Donating
  • Acquiring cryptos as wages, airdrops, and hard forks

You’ll also find rules on worthless cryptos, lost public/private keys, crypto staking, share matching, and declaring losses from crypto scams. Find the complete HMRC guidelines here.

After that, consolidate all your transactions across wallets and exchanges for every crypto coin you own. You can do it manually if you have only a few taxable events. But for more accuracy and ease on your part, you may use a crypto tax tool like ACCOINTING.com for data consolidation and automatic crypto tax report generation.

Are you still finding it challenging to create your tax report? Ask guidance from accountants or tax professionals specialising in cryptocurrencies. You can even have your tax tool-generated reports printed and given to your tax accountant so that he’ll have baseline data for working with you.

2. Submit your reports and tax returns to the HMRC.

Now, it’s time to fill up either an annual Self Assessment tax return or a real-time application via the Capital Gains Tax service. You can do this on the GOV.UK website. Note that you’ll be asked to input either of the following to validate your identity:

  • Government Gateway credentials (username and password)
  • GOV.UK Verify
  • Using a participating European country’s digital ID scheme

Register for a Self Assessment Tax Return, and the HMRC will issue you a Unique Taxpayer Reference (UTR) number. Have your UTR ready when you submit your reports and declarations to HMRC online.

If you don’t have a UTR or you want to manually file tax returns, you can do so by downloading, filling up, and printing out the self-assessment forms. Alternatively, you may also use commercial tax software included on HMRC’s list.

3. Check HMRC’s correspondence to see how much you need to pay.

You will receive official correspondence from HMRC after successfully filing your tax returns. It’ll come through email, traditional mail, or both. HMRC will outline your dues in the letter you’ll receive. Note that the tax you’ll pay is mostly dependent on your income tax rate. 

Additional charges will be imposed as a penalty for any of the following:

  • Late filing of tax returns
  • An inaccurate tax return
  • Missed payment deadlines

You’ll also get your payment reference number in this letter.

4. Follow HMRC’s instructions on the actual payment proper.

HMRC will also give specific details on how you’ll pay for your dues in the letter they’ll send you. Follow the most convenient payment method or scheme for you. Typical payment methods include:

  • Direct debit
  • Online or telephone banking
  • Via cheque through the post
  • Online via corporate credit or debit cards
  • Through your tax code

If you have a large tax to pay, HMRC may allow you to pay in installments. This option would be provided to you in case you qualify.

Check if HMRC has received your payment through your HMRC online account. You’ll be tagged as “paid”, typically in 3-6 working days. If you are paying through the post, include a letter to HMRC asking for an official receipt.

5. Keep your HMRC transaction records and retain all your crypto transaction records.

Congratulations, you’re officially done paying your dues! But don’t skip this fifth step yet. Keep your receipts/transaction records from the HMRC for future reference. It’s also a sound idea to save all your crypto transaction records and tax reports for the tax year you’ve just settled. All these records will help you in case questions, and concerns from the HMRC arise in the future.

The Sum Up

You can conveniently pay your HMRC dues for crypto tax by following our five-step guide. Make your crypto tax reports and payments even more convenient by using a quality crypto tax tool such as ACCOINTING.com. With ACCOINTING.com, you can comply with your UK crypto taxes seamlessly without stressing too much over data consolidation and tax computations!  

Learn the crypto tax rules and prepare your crypto tax reports.

First up, educate yourself about the UK’s crypto tax guidelines. The Her Majesty’s Revenue and Customs (HMRC) released their tax guidance on cryptoassets on 19 December 2018. It has since been updated twice in November and December 2019, respectively. 

The tax guidelines will aid you in identifying your crypto transactions, gains, and losses from different activities such as:

  • Buying
  • Selling
  • Trading
  • Mining
  • Donating
  • Acquiring cryptos as wages, airdrops, and hard forks

You’ll also find rules on worthless cryptos, lost public/private keys, crypto staking, share matching, and declaring losses from crypto scams. Find the complete HMRC guidelines here.

After that, consolidate all your transactions across wallets and exchanges for every crypto coin you own. You can do it manually if you have only a few taxable events. But for more accuracy and ease on your part, you may use a crypto tax tool like ACCOINTING.com for data consolidation and automatic crypto tax report generation.

Are you still finding it challenging to create your tax report? Ask guidance from accountants or tax professionals specialising in cryptocurrencies. You can even have your tax tool-generated reports printed and given to your tax accountant so that he’ll have baseline data for working with you.

Submit your reports and tax returns to the HMRC.

Now, it’s time to fill up either an annual Self Assessment tax return or a real-time application via the Capital Gains Tax service. You can do this on the GOV.UK website. Note that you’ll be asked to input either of the following to validate your identity:

  • Government Gateway credentials (username and password)
  • GOV.UK Verify
  • Using a participating European country’s digital ID scheme

Register for a Self Assessment Tax Return, and the HMRC will issue you a Unique Taxpayer Reference (UTR) number. Have your UTR ready when you submit your reports and declarations to HMRC online.

If you don’t have a UTR or you want to manually file tax returns, you can do so by downloading, filling up, and printing out the self-assessment forms. Alternatively, you may also use commercial tax software included on HMRC’s list.

Check HMRC’s correspondence to see how much you need to pay.

You will receive official correspondence from HMRC after successfully filing your tax returns. It’ll come through email, traditional mail, or both. HMRC will outline your dues in the letter you’ll receive. Note that the tax you’ll pay is mostly dependent on your income tax rate. 

Additional charges will be imposed as a penalty for any of the following:

  • Late filing of tax returns
  • An inaccurate tax return
  • Missed payment deadlines

You’ll also get your payment reference number in this letter.

Follow HMRC’s instructions on the actual payment proper.

HMRC will also give specific details on how you’ll pay for your dues in the letter they’ll send you. Follow the most convenient payment method or scheme for you. Typical payment methods include:

  • Direct debit
  • Online or telephone banking
  • Via cheque through the post
  • Online via corporate credit or debit cards
  • Through your tax code

If you have a large tax to pay, HMRC may allow you to pay in installments. This option would be provided to you in case you qualify.

Check if HMRC has received your payment through your HMRC online account. You’ll be tagged as “paid”, typically in 3-6 working days. If you are paying through the post, include a letter to HMRC asking for an official receipt.

Keep your HMRC transaction records and retain all your crypto transaction records.

Congratulations, you’re officially done paying your dues! But don’t skip this fifth step yet. Keep your receipts/transaction records from the HMRC for future reference. It’s also a sound idea to save all your crypto transaction records and tax reports for the tax year you’ve just settled. All these records will help you in case questions, and concerns from the HMRC arise in the future.

The Sum Up

You can conveniently pay your HMRC dues for crypto tax by following our five-step guide. Make your crypto tax reports and payments even more convenient by using a quality crypto tax tool such as ACCOINTING.com. With ACCOINTING.com, you can comply with your UK crypto taxes seamlessly without stressing too much over data consolidation and tax computations!  

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