UK tax on mining, staking, airdrops, and DeFi yields
Crypto Income Tax Calculator
HMRC Rules on Crypto Income Tax
HMRC treats most crypto income (mining, staking, airdrops, DeFi rewards) as taxable income at the market value at the date of receipt. This creates a cost basis for future CGT calculations — if you later sell the tokens, CGT is on gain from that receipt value.
Key Crypto Income Categories
Mining: Taxed as miscellaneous income (or trading income if mining as a business)
Staking rewards: Taxed as miscellaneous income at receipt value
Airdrops: Usually miscellaneous income; may be CGT if for a service
DeFi interest/yield: Income tax if you have a right to receive a fixed payment; CGT if token lending
Frequently Asked Questions
How is crypto income taxed in the UK?
HMRC taxes mining rewards, staking income, airdrops, and DeFi yields as miscellaneous income at the sterling market value on the date of receipt. Your marginal income tax rate applies (20%, 40%, or 45%).
Do I pay NIC on crypto income?
Usually no — miscellaneous income does not attract NIC. If HMRC decides your mining is a trade (regular, organised, profit-motive), it becomes self-employment income subject to Class 4 NIC (9% / 2%).
What records do I need for crypto income?
Date and time of each receipt, amount in tokens, sterling value at that date (use exchange rates or Coinbase/Binance historical data), and the source (mining pool, staking platform). Maintain a HMRC-compliant crypto log.
Are staking rewards taxed when received or when sold?
Both: income tax at receipt (on the market value when received), then CGT on any gain between the receipt value and the eventual sale price. Two separate tax events for staking rewards.
Is DeFi income taxed differently?
HMRC guidance (2022 update) distinguishes: lending tokens (may be a disposal for CGT), receiving new tokens as reward (income tax). DeFi is complex and evolving — HMRC may update guidance further.
Do I need to report crypto on Self Assessment?
Yes if: total crypto gains exceed £3,000, total crypto proceeds exceed £50,000, or you have crypto income. Report on SA100 (capital gains) and SA101 (supplementary pages) or the online return.
What is the crypto trading allowance?
The £1,000 trading allowance may apply to small crypto mining operations. If gross mining income is under £1,000, it may be fully exempt. Above £1,000, you deduct expenses instead of the allowance.
What costs can I deduct from crypto income?
For mining as a trade: electricity, hardware depreciation (capital allowances), pool fees, and running costs. For non-trade mining: no deduction other than the £1,000 trading allowance if applicable.
Is crypto in a pension taxable?
Cryptocurrencies cannot be held in a UK pension (SIPP/SSAS cannot hold unregulated crypto directly). Some offshore crypto investment vehicles exist but are complex and often HMRC-scrutinised.
What happens if I swap one crypto for another?
Each swap (e.g., ETH to BTC) is a disposal for CGT purposes. Even exchanging on DeFi protocols triggers CGT at the market value on the swap date, regardless of whether you received pounds.
Are crypto gifts taxable?
Gifting crypto to a non-spouse is a disposal at market value for CGT (you are treated as selling at that value). Gifting to a spouse/civil partner is at no-gain no-loss — the recipient takes on your cost basis.
What is HMRC's position on crypto tax evasion?
HMRC has data-sharing agreements with Coinbase, eToro, and other UK crypto exchanges. They have issued 'nudge letters' to known crypto holders. Underreporting crypto income or gains carries penalties of 15–30% (prompted disclosure) or 30–100% (unprompted).