Corporation Tax on Cryptocurrency: How to Report It on Your CT600

More UK companies are holding, trading, or accepting cryptocurrency. HMRC has clear guidance on how it's taxed — and most of it ends up on your CT600.

Here's how corporation tax applies to crypto for limited companies.

HMRC's View: Crypto Is Property, Not Currency

HMRC does not treat cryptocurrency as money or currency. Instead, crypto assets (Bitcoin, Ethereum, stablecoins, NFTs, etc.) are treated as property — specifically, they're either:

Trading stock (if your company trades crypto as a business)
Intangible assets or investments (if held as an investment)

This classification determines how gains are taxed.

Trading vs Investment: Which Are You?

Crypto trading company

If your company buys and sells crypto as its primary business activity (like a crypto exchange or trading firm), profits are treated as trading income:

Taxed as normal trading profits on the CT600
Losses are trading losses (carry forward/back rules apply)
Stock is valued at cost or market value at year-end

Company holding crypto as investment

If your company holds crypto as an investment (bought and held, not actively traded), disposals create chargeable gains:

Corporation tax applies to the gain (not income tax or CGT — companies don't pay CGT)
Gains are reported on the CT600
Losses can be offset against other gains

The grey area

Many companies fall between trading and investment. HMRC looks at:

Frequency of transactions
Purpose — are you speculating or holding long-term?
Organisation — do you have a systematic trading operation?
Funding — is crypto your main business or a side activity?

For most small companies that hold some Bitcoin or accept crypto payments, it's investment, not trading.

Buying Crypto: No Tax Event

Simply buying cryptocurrency with GBP (or other fiat) is not a taxable event. No corporation tax arises when you acquire crypto.

But you must record the acquisition cost — this becomes your base cost for calculating gains when you sell.

Selling Crypto: Chargeable Gain or Loss

When your company sells, exchanges, or disposes of crypto, a chargeable gain or loss arises.

Calculation

Proceeds (GBP value at time of sale)
Minus allowable costs (purchase price + transaction fees)
= Chargeable gain (or loss)

Example

Company bought 2 BTC for £30,000 in January 2025
Company sold 2 BTC for £80,000 in November 2025
Transaction fees: £200
Gain: £80,000 - £30,000 - £200 = £49,800
Corporation tax at 25%: £12,450

Token matching rules

HMRC applies same-day and 30-day matching rules for crypto (similar to share matching):

Same-day rule: Tokens sold are matched first with tokens acquired on the same day
30-day rule: Then matched with tokens acquired in the next 30 days
Section 104 pool: Then matched with the average cost pool

This prevents "bed and breakfasting" — selling and immediately rebuying to crystallise a loss.

Exchanging One Crypto for Another

Swapping Bitcoin for Ethereum (or any crypto-to-crypto exchange) is a disposal for tax purposes. You must:

Calculate the GBP value of the crypto at the time of the swap
Deduct the base cost of the crypto you're disposing of
Report the gain/loss

Example:

Swap 1 ETH (cost £1,500) for 0.05 BTC (value £2,500 at time of swap)
Chargeable gain: £2,500 - £1,500 = £1,000
The 0.05 BTC has a base cost of £2,500

Accepting Crypto as Payment

If your company accepts crypto payment for goods or services:

The GBP value at the time of receipt is your trading income
Report this as normal trading income on the CT600
The crypto received has a base cost equal to that GBP value
When you later sell the crypto, any change in value is a separate gain/loss

Example:

You invoice a client £5,000
They pay in Bitcoin (worth £5,000 at the time)
Trading income: £5,000 (same as if paid in GBP)
Later sell the Bitcoin for £7,000
Capital gain: £2,000

Mining and Staking

Crypto mining

If your company mines cryptocurrency:

As a trade: Mining income is trading income at market value when received
Not a trade: Still taxable as miscellaneous income at market value when received
Mining costs (electricity, hardware) are deductible against the income
Hardware may qualify for capital allowances

Staking rewards

Staking rewards are generally treated as income when received:

Valued at GBP market value at the time of receipt
Taxable as trading income (if part of a trade) or miscellaneous income
The tokens received have a base cost equal to their GBP value at receipt

DeFi lending/yield farming

Income from DeFi protocols (lending interest, yield farming rewards) follows similar principles:

Income taxable at market value when received
Subsequent disposal of tokens is a separate gain/loss event

NFTs

Non-fungible tokens follow the same rules as other crypto assets:

Buying NFTs

Not a taxable event (but record the cost).

Selling NFTs

Disposal creates a chargeable gain/loss.

Creating and selling NFTs

If your company creates and sells NFTs as a business, profits are trading income (like selling any other product).

What Goes on Your CT600

Trading income (if crypto is your business)

Box 1: Include crypto trading profits in total trading income
Standard expense deductions apply

Chargeable gains (if crypto is an investment)

Box 16: Chargeable gains
Box 17: Net chargeable gains (after losses)
Keep detailed computations as supporting evidence

Mining/staking income

Include in trading income (Box 1) if part of a trade
Or in other income if not part of a trade

Record-Keeping Requirements

HMRC requires detailed records of all crypto transactions:

For each transaction, record:

Date of the transaction
Type (purchase, sale, exchange, mining, staking)
Quantity of tokens
GBP value at the time
Counterparty (exchange, wallet address)
Transaction fees
Running balance of each token

How long to keep records

6 years from the end of the accounting period
Longer if HMRC opens an enquiry

Tools

Consider using crypto tax software (Koinly, CoinTracker, etc.) to track transactions automatically. These can generate reports suitable for your CT600 computations.

Loss Relief for Crypto

If your company makes a loss on crypto:

Investment losses (chargeable losses)

Can offset against chargeable gains in the same period
Or carry forward against future chargeable gains
Cannot offset against trading profits

Trading losses (if crypto is your trade)

Normal trading loss rules apply
Carry forward against future trading profits
Or carry back 12 months against total profits

Negligible value claims

If crypto becomes worthless (e.g., a token project fails), you can make a negligible value claim to crystallise the loss without actually selling.

HMRC's Approach to Crypto Compliance

HMRC is actively pursuing crypto tax compliance:

They've issued "nudge letters" to crypto holders (individuals)
They've obtained transaction data from UK crypto exchanges
They exchange data with international tax authorities
Penalties for non-disclosure can reach 200% of the tax due

For companies, HMRC cross-references CT600 filings with exchange data. Under-reporting crypto gains is increasingly risky.

Common Crypto CT600 Mistakes

1. Not reporting crypto-to-crypto swaps

Every swap is a disposal. You can't just track GBP in/out — intermediate trades matter.

2. Using FIFO instead of HMRC's matching rules

HMRC uses same-day, 30-day, then section 104 pool — NOT first-in-first-out.

3. Forgetting transaction fees

Exchange fees and network (gas) fees are part of your allowable costs. Include them to reduce your gain.

4. Not valuing airdrops and forks

If your company receives tokens via an airdrop or fork, they have a base cost of zero (unless you did something to earn them). They're taxable as income at market value when received if they have immediate value.

5. Missing the trading vs investment distinction

If HMRC reclassifies your investment gains as trading income (or vice versa), it can affect loss relief and other calculations.

Frequently Asked Questions

Does my company pay capital gains tax on crypto?

No — companies don't pay CGT. Crypto gains are subject to corporation tax as chargeable gains. The rate is the same as for trading profits (19-25%).

What if I can't determine the GBP value at the time of a transaction?

Use the best available data — exchange rates from major platforms at the time. HMRC accepts reasonable valuations.

Are stablecoins taxed differently?

No. Stablecoins (USDT, USDC, etc.) are treated the same as other crypto. An exchange between GBP and USDT is technically a disposal if there's a gain.

Do I need to report crypto held but not sold?

Not as a gain, but you may need to disclose it in your accounts (as an asset on the balance sheet). No tax arises until disposal.

Can Taxpipe handle crypto in a CT600?

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