Personal Tax & Private Client
From a straightforward return to residence, overseas property and capital gains. We deal with the returns other advisers hand…
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Crypto Accounting & Tax for Traders, Investors and Businesses
Crypto tax is not a separate tax. It is capital gains, income tax, corporation tax and VAT applied to assets that move constantly, across platforms that keep poor records. We rebuild the history, establish the right treatment and report it in a way that stands up if HMRC asks.
Who this is for
Individual investors and active traders holding across multiple exchanges and wallets. Anyone who has swapped, staked, lent or been airdropped tokens and does not know whether that created a tax event. Businesses paid in crypto, companies holding tokens on the balance sheet, miners and Web3 operators. Anyone who has had a letter from HMRC about cryptoassets.
22Named areas on this page
5Chapters, in the order the work happens
Fixed feeAgreed in writing before anything starts
CharteredReviewed and signed off before it leaves us
01Position and treatment 2 areas
Trading or Investing: Establishing the Position
Everything else follows from whether the activity is an investment subject to capital gains tax or a trade taxed as income, and HMRC's position is that individual crypto trading is rarely a trade.
We assess the activity against the badges of trade — frequency, organisation, financing, intention — and document the conclusion so it can be defended.
Cryptoasset Tax Health Check
A review of how crypto has been reported in earlier years, whether cost basis was pooled correctly and whether disposals were missed entirely.
Where something is wrong, we set out the correction route and the exposure before anything is filed.
02Capital gains on disposals 5 areas
Capital Gains Tax on Cryptoasset Disposals
Gains and losses on disposals of tokens are calculated from allowable cost, with the annual exempt amount and the appropriate rate applied.
We compute the position, prepare the capital gains pages and keep the working papers behind every figure.
Pooling and the Matching Rules
Tokens of the same type are held in a pool with a single average cost, subject to the same-day rule and the thirty-day rule that override the pool for recent acquisitions.
Getting the matching wrong is the single most common cause of an incorrect crypto gain, and we apply the rules across the full transaction history rather than to individual trades.
Crypto-to-Crypto Swaps and Spending Crypto
Exchanging one token for another is a disposal for tax purposes even though no sterling is received, and so is using crypto to pay for goods or services.
We identify every disposal event across exchanges and wallets, value it in sterling at the date of the transaction and bring it into the computation.
Transfers, Gifts and Disposals to Connected Parties
Moving tokens between your own wallets is not a disposal, but gifting them or transferring them to a connected party is, and market value applies rather than any consideration paid.
We separate genuine transfers from disposals so that internal movements are not taxed as sales.
Losses, Negligible Value Claims and Lost Access
Crypto losses can be claimed against other gains, carried forward, or in some cases claimed where a token has become worthless or private keys are irrecoverable.
We quantify the loss, choose the right claim and make it within the statutory time limit.
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Book a 30-minute call03Income from cryptoassets 5 areas
Mining and Validation Rewards
Mining rewards are taxable when received, either as miscellaneous income or as trading income where the activity is organised and substantial, with the sterling value at receipt becoming the base cost for a later disposal.
We determine which basis applies, value the receipts and deal with the allowable costs of equipment and electricity.
Staking, Lending and DeFi Returns
Returns from staking, lending and liquidity provision are generally taxable as income when received, and depositing tokens into some protocols can itself be a disposal depending on whether beneficial ownership passes.
We work through the mechanics of each protocol used and apply the treatment that fits, rather than a blanket assumption.
Airdrops, Forks and Referral Rewards
Airdrops received in return for a service are income; those received with nothing given in return are usually not taxed on receipt but carry a nil base cost for a later disposal.
Forks split the existing pool between the old and new tokens. We identify which category each receipt falls into and record the base cost accordingly.
NFTs and Digital Collectibles
NFTs are treated as separate assets rather than pooled, so each one has its own acquisition cost and disposal calculation, and creators minting and selling work face a different analysis again.
We handle both sides, including royalties received on secondary sales.
Crypto as Employment Income and Paying Staff in Crypto
Where tokens are provided by an employer they are earnings, subject to PAYE and National Insurance, and readily convertible assets bring their own valuation and reporting mechanics.
We deal with the payroll treatment, the reporting and the position of the employee on a later disposal.
04Companies and businesses 6 areas
Corporation Tax on Company Cryptoassets
A company holding or dealing in tokens is taxed on chargeable gains, trading profits or under the loan relationship or intangible fixed asset rules depending on what the asset is and why it is held.
We establish the correct regime, compute the result and prepare the corporation tax return with the position properly disclosed.
Accounting for Cryptoassets in Company Accounts
There is no dedicated accounting standard for cryptoassets, so the treatment turns on how the tokens are held: intangible assets, inventory, or in narrow cases something else, with disclosure to match.
We set the accounting policy, prepare the figures and document the judgement for the file.
Businesses Accepting Cryptocurrency Payments
A business paid in crypto records the sale at the sterling value on the date of the transaction, then holds an asset whose later movement is a separate tax event.
We set the bookkeeping up so revenue, the crypto holding and the eventual conversion are all captured correctly.
VAT and Cryptoassets
Exchanging cryptocurrency for conventional currency is generally exempt from VAT, mining is usually outside its scope, but goods and services paid for in crypto are standard supplies valued in sterling.
We establish the VAT position for each supply the business makes and deal with input tax recovery, including where exempt activity restricts it.
Crypto Businesses: Exchanges, Miners, Wallets and Token Issuers
Businesses built on crypto face treasury accounting in volatile assets, functional currency questions, token issuance and treatment of amounts raised, and R&D relief on genuine protocol development.
We act as the accountant and tax adviser to the operating company, not just to the founders' personal positions.
Company Formation and Structuring for Crypto Activity
Whether to hold and trade personally or through a company changes the rate, the reliefs and the route to getting money out, and the answer depends on scale, intention and what happens next.
We model both, and where a company is right we incorporate it and set the structure up properly.
05Records, reporting and HMRC 4 areas
Transaction Reconstruction and Portfolio Reconciliation
Most crypto positions arrive as years of exchange exports, wallet addresses and missing records, with cost basis lost on exchanges that have since closed.
We rebuild the full transaction history from what exists, reconcile it to on-chain and exchange data, and identify and evidence the gaps.
Crypto Tax Software and Record-Keeping
Portfolio and tax software will produce a report from your data, but the report is only as good as the classification behind it, and the defaults are frequently wrong.
We set the software up, review and correct the classifications, and reconcile its output before anything is relied on.
HMRC Nudge Letters and Voluntary Disclosure
HMRC receives data from exchanges and writes to holders it believes have under-reported, and international information-sharing rules for cryptoasset platforms are extending that considerably.
We respond to the letter, establish the actual position and where tax is owed we make a disclosure on the most favourable basis available.
Residence, Situs and Non-UK Holders
Where cryptoassets are located for tax purposes generally follows the residence of the beneficial owner, which makes residence status central for anyone arriving in, leaving or living outside the UK.
We work through the residence position and the reporting consequences on both sides.
Sectors
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Corporate & Business Tax
Corporation tax is not just the CT600. It is how the group is structured, what you capitalise, how profits leave the company and…
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HMRC Enquiries & Disputes
If HMRC has written to you, the first response shapes everything that follows. We take over the correspondence.
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Questions
Frequently asked
Do I have to pay tax on cryptocurrency in the UK?
Usually yes, but on the gain rather than the holding. Selling tokens for sterling, exchanging one token for another, spending crypto or gifting it are all disposals for capital gains tax, and rewards from mining, staking or lending are taxable as income when received. Simply buying and holding is not a taxable event. We work out which of your transactions were disposals, calculate the gain or loss on each, and report the result. Read more.
Is swapping one cryptocurrency for another taxable?
Yes. Exchanging one token for another is a disposal of the first token even though no sterling is received, and the gain is calculated on the sterling value at the moment of the swap. This is the single most commonly missed event in crypto tax and it means an active trader can owe tax without ever having withdrawn any money. We identify every swap across your exchanges and wallets and bring each one into the computation. Read more.
How is the cost of my crypto worked out if I bought it in stages?
Tokens of the same type are held in a pool with a single average cost, so each disposal takes a proportionate share of the pool rather than matching to a specific purchase. Two rules override this: acquisitions on the same day as a disposal, and acquisitions in the thirty days after one. Applying these across a full history is where most self-prepared calculations go wrong, and we apply them properly. Read more.
HMRC has written to me about cryptoassets. What should I do?
Do not ignore it and do not reply with a figure you have not checked. HMRC receives data from exchanges and writes to people it believes have under-reported, but its information is often incomplete. We establish what your actual position is from your own transaction history, respond to the letter and, where tax is genuinely owed, make a disclosure on the most favourable basis available. Read more.
Should I hold my crypto personally or through a company?
It depends on the scale, what you intend to do with the proceeds and whether the activity is investment or trade. A company pays corporation tax on gains and can retain and reinvest them, but extracting the money is a second tax event, and moving existing personal holdings into a company is itself a disposal. We model both positions on your actual numbers before anything is incorporated. Read more.
How an engagement works
Four steps, no surprises
The same route in for every piece of work on this page.
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A 30-minute call
You talk, we listen. What you run, what is not working, what you want the numbers to do for you. With a chartered accountant, not a sales team.
- You bring
- Nothing
- Takes
- 30 minutes
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We review what you have
Last filings, current books, the software in use and any letters from HMRC. We tell you plainly what is in order and what is not.
- You bring
- Last filings and logins
- Takes
- 2 to 5 days
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Fixed scope and fee, agreed in advance
A written scope of exactly what we will do and what it costs, before any work starts. Monthly where the work is ongoing, one-off where it is not.
- You get
- Written scope and fee
- Changes
- Discussed first, never invoiced after
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Handover and onboarding
If you are switching, we write to your existing accountant for professional clearance and collect the records. You do not need to chase anyone.
- You do
- Nothing
- Takes
- Most clients live in two to three days
Next step
Book a 30-minute call
A conversation with a chartered accountant about where you are and what you need. No fee, no obligation, and you will not be sold to.
020 3916 6269 info@sharpaccountax.co.uk We reply to every enquiry within one working day. Prefer to write? Send an enquiry.
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