Key Takeaways
- Crypto profits are subject to capital gains tax in the U.K.
- Investors wishing to file a paper tax return for 2024-2025 must do so before the end of October.
- Online submissions will still be possible after the Halloween cutoff.
With HM Revenue & Customs (HMRC) ‘s key deadline approaching, U.K. taxpayers have until the end of October to file paper tax returns for the year ending April 5.
The cutoff at midnight on Halloween applies to any crypto investors who owe capital gains tax, which is charged on profits over £3,000.
U.K. Cracks Down on Crypto Tax Avoidance
The U.K. tax system treats cryptocurrencies the same way as any other financial assets. But with the surveillance infrastructure needed to catch tax dodgers lagging behind traditional finance, investors haven’t always followed the same strict standards.
In the past, HMRC blamed crypto investors’ poor tax compliance on a lack of awareness. For instance, when it surveyed investors in 2022, the agency observed widespread misunderstandings about when and how how crypto transactions are taxed.
In the following years, an educational push consisted of gentle prompts reminding digital asset investors about their tax liability. Recently, however, the tax authority has taken a harder line.
From January 2026, crypto exchanges in the U.K. will be legally required to collect national insurance numbers from users and share transaction data with HMRC.
Meanwhile, a recent campaign targeted taxpayers in the country suspected of failing to properly report their crypto gains, sending nearly 65,000 warning letters in the 2024-25 tax year.
How Is Crypto Taxed in the U.K.?
Capital gains tax applies to net profits over £3,000 for all disposals. That means taxpayers declare their proceeds from crypto, stocks, gold, or any other asset class together. A separate regime applies to residential properties.
The applicable tax rate is based on net income including capital gains. For the 2024-2025 tax year, a basic rate of 10% applies to individuals earned up to £50,270. Those with higher earnings are required to pay 20% on capital gains.
If a taxpayer’s total income exceeds £50,270 but their income before capital gains doesn’t, only profits that push them over the threshold incur the higher rate.
For the current tax year , the basic rate is set to 18% and the higher rate at 24%. Moreover, the higher rate now applies to all gains made by taxpayers whose total income falls above the threshold, even if their earnings before gains don’t.
HMRC Filing Explained
Investors must file a tax return if their net capital gains for the year exceed £3,000, or their total disposal proceeds exceed £12,000, even if the gains are below the taxable threshold. However, they only need to pay tax on profits above the exemption.
Unrealized profits aren’t subject to capital gains tax and investors don’t need to file a return for simply holding crypto.
Taxpayers can either report capital gains online or file a paper return.
Investors who miss the deadline for paper filings on Oct. 31 can still submit their tax return online until Jan. 31, 2026. This is also the deadline for payment.
Late filings incur a fixed penalty of £100, plus £10 for each day the tax return is overdue, up to 90 days. Penalties apply even if no tax is due.
