Calculating how much tax you owe on your cryptocurrency transactions can be a serious headache, especially if you have made a number of trades across multiple exchanges and wallets. That is when a Crypto Tax Calculator comes in handy. It helps you get an exact number that you owe to the UK Government as taxes.
However, the complexity of calculating your taxes is not an acceptable excuse for skirting your dues, and HMRC has made it clear that it will seek to recover crypto taxes in the UK.
As an example of how messy this can get, consider that all of the following are potentially taxable events in the eyes of HMRC:
- Selling crypto for fiat (like GBP, for example)
- Trading one crypto for another
- Mining cryptocurrencies
- Paying for goods and services with crypto
- Earning crypto
- Gifting or donating crypto
- Receiving airdrops
- Rewards from lending, ‘savings’ interest, staking, referrals, and more
For more information on cryptocurrency taxes in the UK, see our dedicated page.
Given these complexities, the safest and easiest method to calculate your crypto taxes is to use a crypto tax calculator that’s specific to the UK’s tax regime.
Fortunately, there are a number of companies that provide this service, and we have outlined the best ones below…
Short on Time? Here are our Top Picks for Crypto Tax Calculators
If you’re looking to get started with a UK crypto tax calculator right away, one of the following options is likely your best bet…
- Free for 1,000 transactions but no tax reporting
- Paid plans start at $49 per year for 100 transactions
- Connect to >350
- Free for 200 transactions
- Paid plans start at $10.99/month
- Connect to >40 exchanges
- Free for 100 transactions
- Plans start at £10/month
- Around 15 exchange connections available
Now that you know the Best Crypto Tax Calculator in the UK, you might wonder why we should pay taxes for Crypto.
Why Crypto transactions are taxable in the UK
The tax on cryptocurrency In the UK is just like any other asset you own. HMRC considers crypto just like any other asset. When you cash out, you pay the taxes for capital gains. At the beginning of the article, we have potentially taxable events in the eyes of HMRC.
Be it any kind of transaction, buying or selling of cryptocurrency. You will be taxable at the amount you originally paid for the cryptocurrency or in technical terms, you will be taxed in lots.
Tax lots are the record of details of the original price of acquisition of the cryptocurrency. Each value can have a different acquisition value than the other, thereby each transaction constitutes to a lot.
To track your tax lots, you’ll need every transaction history –
- The amount and the value of currency sold
- Original price of acquisition of the currency
- Date acquired/sold
- Fiat value at the time of acquisition & sale
These details are very important and necessary to get the maximum advantage during the filing of taxes. Any sort of missing data might increase your liability towards taxes.
What is a Crypto Tax Calculator?
A cryptocurrency/crypto tax calculator is a tool or software that calculates and provides an estimate of the value of tax owed by an individual towards the capital gains from cryptocurrency transactions.
How do I use a Crypto tax calculator?
Crypto tax calculator software lets the users connect or import their cryptocurrency transaction data, mainly the purchase price, sale price and the crypto tax calculator tool automatically provides the gains or loss and other relevant information to populate your tax reports.
Best Crypto Tax calculator in the UK
We have listed down 4 of the best crypto tax calculators in the UK that abides the HMRC terms and conditions. These websites also have exclusive tools that help the UK citizens calculate their crypto taxes.
Koinly is a popular offering which allows users to prepare crypto tax reports for many jurisdictions including the UK.
The tool has an enormous number of exchange, wallet and blockchain connections, and even allows you to connect to other crypto tax calculators and savings products like Nexo.
The company’s free plan has a tempting 1,000 transactions included, but you will need to sign up to a paid plan to generate tax reports.
CoinTracking is one of the most popular options for calculating your cryptocurrency taxes, with over a million registered users.
As well as offering real-time reports on profit and loss the overall value of your coins, CoinTracking allows you to generate tax reports for a number of tax regimes, including the UK.
Once you have synced your exchange accounts and wallets (the platform supports a large number of exchanges and wallets, but you can always choose to manually import transactions if you prefer), CoinTracking will allow you to create a tax report with a variety of parameters. Once generated, the report will provide you with a breakdown of taxes, as well as top-line figures that will help you fill out HMRC paperwork.
CoinTracking not only supports capital gains tax calculations but also income, among other types of transaction.
Recap is known for its UK cryptocurrency tax support, having been built in collaboration with a number of British accountants and crypto tax specialists.
Like other platforms, Recap allows you to connect to top crypto exchanges or manually import data.
Then, you can generate a tax report that’s ready for your accountant to incorporate into your filings.