Do I need to declare bitcoin and other cryptocurrency profits on a self assessment tax return?
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If you’ve sold NFTs, dabbled in doge or got paid in bitcoin, it all needs to be accounted for with HMRC. The end of January brings with it the deadline for people to file a self assessment tax return in the UK, as well as pay any owed tax from it. While it’s typically the domain of the self-employed, sole traders or those with multiple streams of income, it’s important to note there are a much wider range of individuals who may need to file one to tell HM Revenue and Customs about their financial situations, including people with income from rentals, dividends or even side hustles. Equally, there are ways to lower your tax bill if certain situations apply to you.
One particularly key area which is also worth checking to see if you need to declare income is a comparatively new one: declaring profits from trading or selling cryptocurrencies such as bitcoin. Here’s everything you need to know about including it on your return this year.
The short answer is “yes”, but as is the case with most items regarding tax in the UK, the true answer is somewhat trickier than that. Everything you’d think of as a digital asset, basically. Whether you’re trading in etherium or doge instead of bitcoin, have sold NFTs or tokens which were airdropped to you, these all count.
And yes, that means even the ridiculous punts referred to as altcoins, memecoins or s***coins. Cryptoassets, as the UK government labels cryptocurrencies such as bitcoin and any other tokens, are treated in much the same way other assets are: if you trade or sell them and generate an income, you need to report it and may need to pay tax on it.
