Find out how Income Tax and National Insurance contributions apply when you receive cryptoassets (like cryptocurrency or bitcoin).
HM Revenue and Customs (HMRC) have updated its information on the taxation of cryptoassets.
HMRC are reminding that any cryptoasset exchange tokens received from employment, or from activities such as mining, staking or lending count as income. This includes any income earned from Decentralised Finance (DeFi).
If you receive tokens as income, you’ll need to keep record and may need to pay:
- Income Tax
- National Insurance contributions
If you purchased the tokens there may be tax to pay when sold.
If an employer pays using tokens
If receiving cryptoassets as employment income they will count as ‘money’s worth’. The value of the asset will be subject to Income Tax and National Insurance contributions.
It is the tax payers responsibility to check and make sure the correct tax is paid. UK employers must pay your Income Tax and National Insurance contributions through PAYE before they pay you.
If they pay you in tokens, they’ll estimate the value of them, and pay Income Tax and National Insurance contributions based on the estimate.
If you sell the cryptoasset that you’ve paid Income Tax on at a later date, you should calculate Capital Gains Tax as normal on any increase in the value of the tokens since you received them.
Records keeping
You must keep records:
- type of tokens
- date received
- number of tokens received
- Total number of tokens
- value in pound sterling
- bank statements
- the details of the disposal
- wallet addresses.
PAYadvice.UK 29/4/2025