Can I Put Cryptocurrency in a Limited Company

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

This is a question I am being asked more and more often, and in my experience it usually comes from business owners who are already involved in crypto personally and are now thinking more strategically. They might be trading actively, holding long term, running an online business, or simply looking for a more tax efficient structure. What they are really asking is whether a limited company can hold cryptocurrency, and whether doing so makes sense from a tax, accounting, and risk perspective.

The short answer is yes, a UK limited company can hold cryptocurrency. There is nothing in UK company law or tax law that prevents this. However, in my opinion, that simple answer hides a great deal of complexity. How the crypto gets into the company, what the company does with it, how transactions are recorded, and how profits are taxed all matter enormously.

In this article I want to explain the position properly, based on real world UK practice rather than theory. I will cover how a limited company can own cryptocurrency, the different ways crypto can be introduced into a company, how HMRC treats crypto for corporation tax purposes, and the common mistakes I see when people rush into this without fully understanding the implications.

By the end, you should be clear not only on whether you can put cryptocurrency into a limited company, but whether you should, and if so, how to do it sensibly.

The legal position in the UK

Let me start with the fundamentals. A UK limited company is a separate legal person. It can own assets, enter into contracts, and incur profits or losses in its own right. Cryptocurrency is treated as an asset for UK tax purposes, not as money, and there is no restriction on a company owning assets of this type.

From a legal perspective, a limited company can:

• Buy cryptocurrency
• Hold cryptocurrency
• Sell cryptocurrency
• Use cryptocurrency in trading activities
• Accept cryptocurrency as payment

In my experience there is often confusion because crypto feels unconventional, but from a legal standpoint it is simply another type of asset.

HMRC’s view on cryptocurrency

HMRC does not treat cryptocurrency as currency. Instead it is treated as a cryptoasset, broadly similar to shares or other intangible assets.

This distinction is important because it affects how profits are taxed. Companies do not pay capital gains tax, they pay corporation tax, and crypto profits fall into that regime.

In my opinion one of the biggest mistakes people make is assuming that crypto inside a company is taxed in the same way as crypto held personally. It is not.

Why people consider putting crypto into a limited company

From experience, there are several common reasons business owners consider using a limited company for cryptocurrency.

The most common ones are:

• Corporation tax rates are lower than higher rate personal tax
• Profits can be retained inside the company
• Clear separation between personal and business activity
• Easier to reinvest profits
• Perceived professionalism and structure

While all of these can be valid, they do not automatically mean a company is the right vehicle.

How cryptocurrency can be introduced into a company

This is one of the most important areas to understand, and in my opinion where most people go wrong.

There are several ways cryptocurrency can end up inside a limited company, and each has very different tax consequences.

The company buys cryptocurrency directly

This is the cleanest and simplest route.

The company uses its own funds to purchase cryptocurrency through an exchange or broker. The crypto belongs to the company from the outset.

From an accounting perspective:

• The crypto is recorded as an asset on the balance sheet
• Transactions are recorded in GBP at the time they occur
• Gains or losses are recognised when crypto is disposed of

From experience, this route causes the fewest problems provided records are kept properly.

The director transfers personal cryptocurrency into the company

This is far more complicated, and in my opinion should never be done casually.

If you already own cryptocurrency personally and want to move it into a limited company, this is treated as a disposal for tax purposes. You are effectively selling the crypto to the company, even if no cash changes hands.

This can trigger:

• Personal capital gains tax
• Complex valuation issues
• Director’s loan account movements

From experience this often leads to unexpected tax bills and messy accounting.

The company accepts cryptocurrency as payment

Some businesses accept cryptocurrency from customers. In this case the crypto is simply trading income.

The company must:

• Record the GBP value at the time of receipt
• Include that value in taxable income
• Track the crypto separately as an asset thereafter

Any later movement in value becomes a separate gain or loss when the crypto is sold or exchanged.

How cryptocurrency is taxed inside a limited company

This is where the distinction between personal and company crypto becomes critical.

A limited company does not pay capital gains tax. All profits and losses, including those from crypto, fall under corporation tax.

Broadly speaking:

• Trading profits are subject to corporation tax
• Investment gains are also subject to corporation tax
• Losses may be offset subject to rules

From experience HMRC looks at the company’s activity to determine whether crypto activity is trading or investment in nature.

Trading versus investment activity

In my opinion this is one of the most misunderstood areas.

If a company is actively buying and selling crypto with frequency, intent, and organisation, HMRC may view this as trading activity.

If the company buys crypto and holds it long term, with infrequent disposals, it is more likely to be treated as an investment.

The distinction matters because it affects:

• How profits are calculated
• How losses are treated
• How HMRC views the company’s activities

From experience HMRC looks at behaviour rather than labels.

Corporation tax on crypto profits

All crypto profits in a limited company are subject to corporation tax at the applicable rate for the accounting period.

This means:

• Gains are taxed when realised
• Losses may be deductible
• No annual CGT allowance applies

In my opinion the lack of a CGT allowance is often overlooked. Individuals benefit from an annual exemption, companies do not.

However companies benefit from lower headline tax rates and the ability to retain profits.

VAT and cryptocurrency

In the UK, exchanging cryptocurrency for fiat currency is generally exempt from VAT. However this does not mean all crypto related activity is VAT free.

If a company provides services related to crypto, such as consultancy, mining services, or platform fees, VAT treatment can become complex.

From experience VAT is one of the areas where specialist advice is often needed.

Accounting and record keeping

Crypto accounting is significantly more complex than traditional cash accounting.

A company must:

• Record each transaction in GBP
• Track acquisition costs
• Track disposals
• Account for exchange fees
• Maintain wallet and exchange records

From experience poor records are the number one reason companies get into trouble with crypto.

HMRC expects clear audit trails, even if transactions occurred on decentralised platforms.

Wallets and security considerations

Another practical issue is custody.

If a company holds crypto, it should be clear who controls the wallets and how access is managed.

From experience common approaches include:

• Company controlled exchange accounts
• Multi signature wallets
• Clear internal controls

Blurring personal and company wallets is a recipe for disputes and tax problems.

Directors, dividends, and extracting value

One of the biggest misunderstandings I see is the belief that holding crypto in a company somehow avoids personal tax permanently. It does not.

Eventually, if you want to extract value personally, tax arises.

This may be through:

• Salary
• Dividends
• Director’s loan repayments

Each route has different tax implications. Crypto does not bypass these rules.

From experience companies that retain crypto long term still face personal tax when value is extracted.

Using a company for crypto trading, is it a good idea?

In my opinion this depends entirely on circumstances.

A company can be suitable if:

• You are actively trading
• You want to reinvest profits
• You are comfortable with compliance
• You accept additional administration

A company may be unsuitable if:

• You are a casual investor
• You want simplicity
• You rely on CGT allowances
• You do not want ongoing costs

From experience many individuals would have been better off holding crypto personally rather than rushing to incorporate.

Common mistakes I see

Based on experience, the most common mistakes include:

• Transferring personal crypto into a company without understanding CGT
• Poor record keeping
• Mixing personal and company wallets
• Assuming HMRC does not track crypto
• Ignoring corporation tax until it is too late

Each of these can lead to serious problems.

Does a limited company give better tax outcomes?

In my opinion there is no universal answer.

For some people, particularly higher rate taxpayers who want to reinvest profits, a company can be tax efficient.

For others, particularly long term holders with modest activity, personal ownership may be simpler and more tax efficient.

The key is modelling the numbers properly rather than assuming.

Regulatory and banking considerations

Another practical point is banking.

Many UK banks are cautious around crypto. A company involved in crypto may face:

• Account closures
• Transaction delays
• Additional scrutiny

From experience choosing the right bank and being transparent matters.

When professional advice is essential

In my opinion crypto inside a limited company is one of those areas where professional advice is not optional.

You are dealing with:

• Corporation tax
• Capital gains tax
• Accounting standards
• HMRC compliance
• Director responsibilities

Getting it wrong can be expensive.

Where this leaves you

So can you put cryptocurrency in a limited company? Yes, absolutely.

But should you? That depends on your goals, your activity level, your risk tolerance, and your willingness to deal with complexity.

In my opinion a limited company is a powerful tool, but it is not a shortcut or a loophole. Crypto held in a company is still taxable, still reportable, and still subject to scrutiny.

From experience the best outcomes come when people slow down, understand the rules, and choose a structure that fits their situation rather than chasing perceived tax advantages.

If there is one takeaway, it is this. Cryptocurrency does not sit outside the UK tax system, and putting it inside a limited company changes the rules, but it does not remove them.

If you would like to explore related investing and crypto guidance, you may find Can I reclaim tax if I lost access to my crypto wallet and Do I have to pay tax on crypto gifted from abroad useful. For broader investing context, visit our stocks and shares guidance hub.