Can I Claim Accounting Fees for Crypto Tax as an Expense

At Towerstone, we provide specialist crypto accountancy services for UK investors and businesses. We have written this article to explain when fees may be deductible, helping you understand the tax and reporting position.

This is a question I am asked with increasing frequency and in my opinion it reflects just how mainstream crypto has become in the UK. A few years ago, crypto tax queries were niche and usually involved small amounts. Now, I regularly deal with clients who have traded across multiple exchanges, used DeFi platforms, staked tokens, received airdrops, and only later realised that HMRC expects a clear and accurate tax return.

At that point, accounting fees feel unavoidable. The natural follow-up question is whether those fees can be claimed as an expense.

From experience, the answer is often yes, but not always in the way people expect. It depends on who you are, how you are taxed, and what the fees relate to. Getting this wrong can lead to disallowed expenses, amended returns, or unnecessary tax.

In this guide, I am going to explain when accounting fees for crypto tax are allowable, when they are not, and how HMRC views these costs in practice. I will also share common mistakes I see and what I advise clients to do to stay on the right side of the rules.

How HMRC Views Crypto for Tax Purposes

Before we look at expenses, it is important to understand how crypto itself is treated.

In the UK, cryptoassets are not treated as currency. HMRC treats them as assets for tax purposes.

This means that depending on what you do with crypto, it can fall under:

Capital Gains Tax

Income Tax

Corporation Tax

In some cases, both income tax and capital gains tax at different points

Guidance on this is published by HM Revenue & Customs and made available through GOV.UK.

From experience, misunderstanding this basic point leads directly to confusion about expenses.

Why Crypto Tax Accounting Is Often More Complex

Crypto tax is rarely straightforward.

Even relatively small portfolios can involve:

Hundreds or thousands of transactions

Multiple wallets and exchanges

Transfers between platforms

Token swaps

Fees paid in crypto

Assets that no longer exist

Missing data

In my opinion, this complexity is why professional help is often essential rather than optional. However, HMRC does not automatically allow every cost just because crypto is complicated.

The General Rule on Claiming Accounting Fees

The general rule in UK tax is this:

Accounting fees are allowable if they are incurred wholly and exclusively for the purpose of earning or reporting taxable income or gains.

This principle applies across self assessment, trading income, capital gains, and company tax.

However, how it applies depends on your tax position.

Claiming Accounting Fees as an Individual Investor

Let us start with the most common scenario.

If you are an individual who has invested in crypto personally and you need an accountant to help calculate your capital gains, the position is nuanced.

Capital Gains Tax and Accounting Fees

For capital gains tax, HMRC does not generally allow accounting fees as a deductible expense against gains.

This means:

You cannot usually deduct crypto tax accounting fees from your capital gains

The fees do not reduce the gain itself

They are not allowable as a CGT expense in the same way as acquisition or disposal costs

From experience, this is one of the most disappointing answers for clients, especially when fees are high due to transaction volume.

However, there are exceptions and alternative treatments depending on circumstances.

When Accounting Fees May Still Be Claimable Personally

While you cannot usually deduct accounting fees directly from capital gains, there are situations where they may still be allowable elsewhere.

These include:

If the fees relate partly to taxable income rather than gains

If you are trading in crypto rather than investing

If the fees relate to preparing accounts for a business activity

If the fees relate to allowable income tax reporting

This is where the distinction between investing and trading becomes critical.

Crypto Trading Versus Investing

HMRC draws a clear distinction between investing and trading.

Most individuals are investors, even if they trade frequently.

However, if your crypto activity amounts to a trade, different rules apply.

Indicators of trading may include:

High frequency transactions

Short holding periods

Intention to profit from short term price movements

Commercial organisation and record keeping

Use of borrowed funds

Repetition and scale

From experience, HMRC sets the bar for crypto trading quite high. Most people fall under capital gains tax rather than income tax.

Accounting Fees for Crypto Trading Income

If you are genuinely trading in crypto and paying income tax on profits, accounting fees are usually allowable as a business expense.

This means:

Fees can be deducted from trading profits

They reduce taxable income

They are claimed in the self employment section of the tax return

In my opinion, this is one of the clearest cases where crypto accounting fees are allowable.

However, misclassifying yourself as a trader when you are not is risky and can attract HMRC attention.

Claiming Accounting Fees as a Sole Trader

If you are registered as self employed and your crypto activity forms part of your trade, accounting fees are normally allowable.

This includes fees for:

Calculating crypto profits

Reconciling transactions

Preparing accounts

Completing the self assessment return

The key requirement is that the crypto activity is part of the business.

From experience, freelancers and contractors who accept payment in crypto often fall into this category.

Claiming Accounting Fees for Crypto as a Limited Company

The rules are much clearer for limited companies.

If a company holds or trades crypto and incurs accounting fees to comply with tax obligations, those fees are generally allowable.

This includes:

Corporation tax computations

Crypto transaction reconciliation

Valuation of holdings

Capital gains calculations

Compliance reporting

In my opinion, companies have the strongest position when it comes to claiming crypto related accounting fees.

The fees are incurred wholly and exclusively for the purposes of the company’s trade or compliance.

Director Versus Company Costs

One area I see confusion is where a director pays crypto accounting fees personally.

If the crypto activity belongs to the company:

The company should pay the fees

Or reimburse the director

And claim the cost as an expense

If the crypto activity is personal, the company should not be involved.

From experience, mixing the two creates unnecessary risk.

Claiming Fees for Crypto Software and Tools

Many people use specialist crypto tax software before or alongside an accountant.

The treatment of these costs usually mirrors accounting fees.

Allowable for companies and traders

Usually not deductible for individual capital gains investors

However, if software is used partly for business income and partly for personal investment, apportionment may be required.

Are Accounting Fees for Amended Returns Allowable?

This is a very common follow-up question.

If you have made mistakes in previous crypto tax returns and need an accountant to amend them, the allowability depends on the underlying tax position.

In general:

Allowable for businesses and companies

Not usually deductible for personal capital gains

From experience, HMRC is more concerned with accuracy than punishment, but that does not change expense rules.

What HMRC Does Not Allow

It is important to be clear on what HMRC does not allow.

You cannot usually claim:

Accounting fees for purely personal tax advice

Fees related only to capital gains calculations as an individual investor

Costs that are not linked to taxable income or trade

Fees for learning about crypto or speculation

In my opinion, trying to force personal costs into allowable categories is a false economy.

Common Mistakes I See

From experience, the most common issues include:

Claiming crypto accounting fees against capital gains incorrectly

Treating investment activity as a trade without evidence

Claiming personal costs through a company

Failing to apportion mixed use costs

Assuming all accounting fees are always allowable

Not keeping invoices and descriptions

These mistakes often lead to HMRC queries rather than tax savings.

How to Improve Your Position Legitimately

While the rules are strict, there are sensible steps that can improve your position.

These include:

Structuring crypto activity through a company where appropriate

Separating investment and trading activity clearly

Ensuring invoices clearly describe business related work

Keeping detailed records of transactions

Taking advice before activity becomes complex

Understanding tax treatment before filing

In my opinion, good planning beats retrospective justification every time.

My Honest View From Experience

In my opinion, the frustration around crypto accounting fees comes from expectations rather than rules.

People assume that because HMRC taxes crypto, it should allow all related costs. That is not how UK tax law works.

From experience, the people who struggle most are those who mix personal investing with business thinking. The people who do best are those who understand their tax category and work within it.

Crypto is not special in HMRC’s eyes. It follows the same principles as shares, property, and other assets.

Where this leaves you

So can you claim accounting fees for crypto tax as an expense?

Sometimes yes, sometimes no.

If you are a company or a genuine crypto trader, accounting fees are usually allowable. If you are an individual investor subject to capital gains tax, they are usually not deductible, even if they feel essential.

In my opinion, the key is clarity. Know whether your crypto activity is investing or trading, keep your records clean, and structure things properly from the start.

From experience, that approach saves far more money and stress than trying to claim expenses after the fact.

If you would like to explore related investing and crypto guidance, you may find Can I gift cryptocurrency without paying tax and Can I move crypto between wallets without paying tax useful. For broader investing context, visit our stocks and shares guidance hub.