Do I Need an Accountant to Handle My Crypto Tax Return

As cryptocurrency investing becomes more common in the UK, so do questions about tax reporting. HMRC now treats cryptoassets like Bitcoin and Ethereum as taxable assets, meaning investors and traders must declare profits and income each year. For many people, calculating crypto tax can be complicated, leading them to wonder whether they need an accountant to handle their return. This article explains when professional help is worthwhile, what an accountant can do for you, and how to stay compliant with HMRC’s crypto tax rules.

Understanding How Crypto Is Taxed in the UK

HMRC does not treat crypto as money or foreign currency. Instead, it views it as a form of property or digital asset. The tax you pay depends on how you earn or use your crypto.

  • Capital Gains Tax (CGT): Applies when you sell, trade, or dispose of crypto for more than you paid. This includes swapping one crypto for another, spending it on goods or services, or converting it to pounds.

  • Income Tax: Applies if you receive crypto through mining, staking, airdrops, or as payment for work. The crypto’s value in pounds at the time you receive it counts as taxable income.

Crypto tax is therefore not based on the number of coins you hold but on what you do with them. HMRC requires you to calculate the value of every taxable transaction and report it in your annual Self Assessment return.

Why Crypto Tax Can Be Complicated

Calculating crypto tax is not always straightforward. The complexity depends on how much trading or activity you do.

If you only made one or two transactions in the year, you may be able to handle the calculations yourself using HMRC’s guidance. But if you are an active trader or use multiple exchanges, the process becomes much more complex because:

  • Each transaction must be converted into pounds using the market rate on the day it occurred.

  • HMRC’s share pooling rules apply, meaning you must average the cost of similar assets when calculating gains.

  • Transactions across multiple wallets and exchanges must be reconciled to avoid double-counting or missing data.

  • Airdrops, staking rewards, and DeFi activities may require separate treatment for income tax and capital gains.

Even experienced investors often find it challenging to calculate their taxable gains accurately. Mistakes can lead to underpayment, penalties, or unnecessary overpayment.

When You Should Consider Hiring an Accountant

You do not legally need an accountant to file a crypto tax return, but professional help is often beneficial if:

  • You trade frequently across several exchanges or wallets.

  • You use DeFi platforms, yield farming, or NFT marketplaces.

  • You have received crypto as part of your business or freelance income.

  • You have both crypto capital gains and crypto income to declare.

  • You have not reported crypto in previous tax years and need to make a voluntary disclosure.

An accountant experienced in cryptocurrency taxation can navigate these situations, saving time and reducing stress.

How an Accountant Can Help with Your Crypto Tax Return

A crypto-specialist accountant does more than simply fill out your return. They ensure accuracy, compliance, and efficiency by:

  1. Collecting and reconciling data:
    They gather data from all your wallets and exchanges, ensuring transactions are recorded in pounds and fully accounted for.

  2. Applying the correct tax treatment:
    They distinguish between capital gains and income, applying HMRC’s share pooling rules and allowances correctly.

  3. Calculating taxable profits:
    Accountants use professional software or manual calculations to determine accurate gains, losses, and taxable income.

  4. Claiming allowable losses:
    They identify and record capital losses that can be used to offset future gains, potentially reducing future tax bills.

  5. Preparing and submitting your tax return:
    They complete the crypto section of your Self Assessment accurately and on time, ensuring HMRC receives all the required details.

  6. Advising on tax efficiency:
    Accountants can recommend strategies for future years, such as timing disposals to make use of annual allowances or structuring transactions more efficiently.

The Benefits of Using an Accountant

Hiring an accountant offers several practical and financial benefits:

  • Accuracy: Professional calculations reduce the risk of errors and HMRC penalties.

  • Time saving: Crypto tax reporting can take hours or days without expert help.

  • Peace of mind: You can be confident your figures comply with HMRC’s rules.

  • Tax optimisation: Accountants help you use available allowances, such as the £3,000 annual CGT exemption.

  • Support for future planning: They can assist with ongoing tax management if you continue to trade or invest heavily.

Even if you use crypto tax software, an accountant can review your calculations to ensure they align with HMRC’s requirements.

Handling Missed or Late Crypto Reporting

If you have not declared your crypto gains or income in previous years, it’s important to correct the record as soon as possible. HMRC has received data from major exchanges and is sending letters to individuals suspected of underreporting.

An accountant can help you:

  • Assess how much tax is owed for previous years.

  • Prepare a voluntary disclosure to HMRC before penalties escalate.

  • Negotiate payment arrangements if necessary.

Taking proactive action with professional support usually results in lower penalties and faster resolution.

Can You File Without an Accountant

Yes, you can file your crypto tax return without an accountant if your activity is simple. HMRC provides detailed guidance online and expects taxpayers to keep accurate records.

However, if your crypto activity involves multiple exchanges, international platforms, or a mix of personal and business use, professional help will almost always save time and money.

Remember, HMRC holds increasing amounts of data from crypto exchanges, so any inaccuracies can be easily detected. Having an accountant ensures your tax return stands up to scrutiny.

How to Choose the Right Accountant

If you decide to hire an accountant, look for one who:

  • Has experience with cryptocurrency taxation.

  • Understands both income tax and capital gains tax rules for digital assets.

  • Uses specialist crypto tax software for accuracy and efficiency.

  • Can provide long-term advice on tax planning and record keeping.

It is best to engage an accountant well before the tax deadline to allow enough time for data gathering and analysis.

Summary

You do not have to hire an accountant to complete your crypto tax return, but professional help can make a huge difference if your situation is complex. An experienced accountant can manage the data, ensure compliance, claim losses, and prevent errors that could lead to HMRC penalties.

If you only made a few simple trades, you may be able to calculate your own gains and submit your return directly. However, for active traders or anyone earning crypto income, professional advice provides accuracy, confidence, and peace of mind.

Crypto tax in the UK is evolving rapidly, and HMRC is becoming more vigilant. Working with a qualified accountant ensures you stay compliant and keep more of your profits in the long term.