How Can I Prove the Value of Crypto for My Accounts

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

In my experience, proving the value of crypto is one of the most stressful and misunderstood parts of crypto accounting. People are usually not trying to hide anything. They simply traded on multiple platforms, moved assets between wallets, used DeFi, or held crypto for years without ever thinking they would need to evidence values formally.

Then reality hits. An accountant asks for figures, HMRC asks a question, company accounts are due, or a tax return needs to be finalised. Suddenly the question is no longer theoretical. How do I actually prove what my crypto was worth?

In my opinion, this is where many people panic unnecessarily. The rules are not as rigid as people fear, but they do require structure, consistency, and evidence. HMRC does not expect perfection. What it expects is that values are reasonable, well supported, and applied consistently.

In this article, I am going to explain how crypto values should be evidenced for accounts and tax purposes in the UK, what HMRC accepts in practice, what mistakes I see repeatedly, and how to protect yourself if values are ever questioned. Everything here is based on real cases I have dealt with, not theory.

Why Proving Crypto Value Matters

Crypto valuation is not just an academic exercise. It directly affects:

• Capital Gains Tax calculations
• Income Tax calculations
• Company accounts
• Director loan accounts
• Corporation Tax
• HMRC enquiries and investigations

In my experience, most problems arise not because the value was wrong, but because there was no evidence to support how it was arrived at.

HMRC is far more forgiving of a reasonable valuation backed by evidence than a perfect number with no explanation.

HMRC’s General Approach to Crypto Valuation

HMRC does not require crypto to be valued using a single official exchange or data source. This surprises many people.

HMRC’s core expectation is that:

• Values are expressed in GBP
• The valuation reflects fair market value at the relevant time
• The method is reasonable and consistent
• Records are kept

In my opinion, this flexibility is helpful, but it also places responsibility on the individual to do things properly.

What Does Fair Market Value Mean for Crypto?

Fair market value is essentially the price that could reasonably have been obtained on the open market at that time.

For crypto, this usually means:

• The spot price at the time of the transaction
• The price shown on the exchange where the trade occurred
• A widely recognised market price

From experience, HMRC understands that crypto prices fluctuate constantly. It does not expect millisecond precision.

What it does expect is that you did not cherry pick prices to reduce tax.

When Do You Need to Prove Crypto Value?

You typically need to evidence crypto value at the following points:

• When you dispose of crypto
• When you swap one crypto for another
• When crypto is received as income
• At a company balance sheet date
• When crypto is gifted
• When crypto is used to buy goods or services

In my experience, people often focus only on disposals and forget that income and balance sheet valuations matter just as much.

Proving Value for Capital Gains Tax

For Capital Gains Tax, the key valuation point is the moment of disposal.

That disposal could be:

• Selling crypto for GBP
• Swapping crypto for another crypto
• Using crypto to buy something
• Gifting crypto

At that moment, you must record the GBP value of the crypto disposed of.

In my opinion, this is the most important valuation to get right.

Acceptable Sources of Crypto Valuation Evidence

HMRC accepts a range of evidence sources, provided they are credible.

From experience, the most commonly accepted sources are:

• Exchange trade confirmations
• Exchange transaction history exports
• Wallet transaction records combined with market prices
• Reputable crypto pricing websites
• Portfolio tracking software

The key is being able to show where the number came from.

Using Exchange Data as Evidence

If a trade happened on a centralised exchange, this is usually the easiest case.

Most exchanges allow you to download:

• Full transaction histories
• Trade confirmations
• Timestamped records
• Prices at execution

In my opinion, exchange data is the strongest form of evidence because it reflects an actual executed price.

If you traded BTC to ETH on an exchange, the GBP value shown or implied by that trade is generally acceptable.

Screenshots Versus Downloads

People often ask whether screenshots are enough.

From experience:

• Screenshots are better than nothing
• Downloaded CSV files are far better
• Original exchange records carry more weight

Screenshots can be challenged more easily. CSV exports with timestamps and transaction IDs are much stronger.

Proving Value for Wallet to Wallet Transactions

Wallet to wallet transfers do not have a built in GBP value. This is where people struggle most.

In these cases, you need to:

• Identify the transaction time
• Identify the crypto and amount
• Apply a reasonable market price at that time
• Record the GBP equivalent

In my opinion, consistency is crucial here.

Using Market Price Data for Wallet Transactions

When there is no exchange price, you can use market price data from reputable sources.

These include:

• Large crypto price aggregators
• Well known exchanges
• Index based pricing tools

The important thing is to:

• Use the price at or near the transaction time
• Use the same source consistently
• Keep a record of the source

From experience, HMRC does not insist on one specific website. It insists on logic and consistency.

What If Prices Differ Between Exchanges?

Crypto prices can differ slightly between exchanges.

This causes anxiety for people who worry they might choose the wrong price.

In my opinion, this worry is overblown.

HMRC understands that:

• Crypto prices vary
• There is no single official price
• Minor differences are inevitable

What matters is that the price used is reasonable and not manipulated.

Using an average price or the price on the exchange most relevant to your activity is usually fine.

Proving Value for Crypto Income

Crypto received as income must be valued at the GBP value when received.

This applies to:

• Mining rewards
• Staking rewards
• Airdrops
• Payment for services
• Employment income paid in crypto

From experience, this is where people often forget to record values altogether.

You should record:

• Date and time received
• Amount of crypto
• GBP value at that time
• Source of the valuation

This GBP value then becomes your acquisition cost for future capital gains calculations.

Valuing Crypto in Company Accounts

For companies, crypto valuation is even more important.

At the balance sheet date, crypto holdings must be valued correctly.

Depending on circumstances, crypto may be treated as:

• Intangible assets
• Inventory
• Investments

From experience, most UK companies treat crypto as intangible assets.

This usually means:

• Recorded at cost
• Impairment considered if value falls
• Not revalued upwards

This is an accounting judgement area and advice is essential.

Evidence for Balance Sheet Valuations

For company accounts, you should retain:

• Wallet balances at the balance sheet date
• Market price evidence at that date
• Explanation of valuation method

In my opinion, documenting your approach is just as important as the numbers themselves.

What About Using Portfolio Tracking Software?

Many people use crypto portfolio trackers.

From experience, these can be very helpful, but they are not evidence on their own.

They are best used as:

• Calculation tools
• Aggregation tools
• Reconciliation aids

You should still retain the underlying data such as exchange exports and wallet records.

Think of software as the calculator, not the proof.

Proving Value When Records Are Incomplete

This is a very common situation.

People often say:

• I changed exchanges
• The platform no longer exists
• I lost old emails
• I never downloaded anything

From experience, all is not lost, but reconstruction is required.

Reconstructing Crypto Values

Reconstruction involves:

• Rebuilding transaction timelines from blockchain data
• Identifying approximate transaction times
• Applying reasonable market prices
• Documenting assumptions

HMRC accepts reconstructed records if they are reasonable and well explained.

In my opinion, transparency is more important than precision here.

Documenting Assumptions Clearly

If you have had to estimate values, document that fact.

Your records should explain:

• Why exact data was unavailable
• What source was used
• Why the approach is reasonable

From experience, HMRC is far more accepting when assumptions are clearly stated rather than hidden.

Proving Value During an HMRC Enquiry

If HMRC questions your crypto figures, it will usually ask for:

• Transaction records
• Valuation methodology
• Supporting evidence

This is where good record keeping pays off.

In my experience, most enquiries end quickly when evidence is organised and logical.

What HMRC Does Not Expect

HMRC does not expect:

• Perfect prices to the second
• One single approved exchange
• Complex financial modelling
• Expert level crypto knowledge

It expects reasonable evidence and honesty.

In my opinion, people often overestimate how aggressive HMRC will be if records are sensible.

Common Mistakes I See

Over the years, I see the same issues repeatedly.

These include:

• Not recording GBP values at the time
• Relying on end of year prices
• Mixing valuation sources inconsistently
• Losing original transaction records
• Assuming software outputs are sufficient evidence

In my opinion, most of these mistakes are avoidable with simple habits.

How Long Should You Keep Crypto Valuation Records?

HMRC expects records to be kept for at least:

• Five years after the 31 January submission deadline

For companies, records should be kept longer.

From experience, keeping crypto records indefinitely is sensible given how long issues can arise later.

Practical Record Keeping Tips

Based on experience, I recommend:

• Downloading exchange histories regularly
• Keeping wallet addresses documented
• Recording GBP values at transaction time
• Saving price source screenshots or links
• Backing up records securely

In my opinion, doing this as you go is far easier than rebuilding years later.

Emotional Aspect of Crypto Record Keeping

I think it is important to say this.

Many people avoid dealing with crypto records because it feels overwhelming or because they fear what they might find.

From experience, avoidance almost always makes things worse.

Facing the data calmly and methodically leads to far better outcomes.

My Professional View

In my opinion, proving the value of crypto is not about finding the perfect number. It is about demonstrating a reasonable, consistent, and evidence based approach.

HMRC is far more interested in whether you acted sensibly than whether your valuation differed by a few pounds.

From experience, the people who struggle most are those who assumed crypto did not need proper records.

When Professional Help Is Worth It

Professional help is particularly valuable if:

• There are large values involved
• Records are incomplete
• There is business activity
• HMRC has contacted you
• You are preparing company accounts

From experience, the cost of help is usually far less than the cost of errors.

Where this leaves you

So, how can you prove the value of crypto for your accounts?

By using reasonable market values in GBP, keeping consistent records, retaining exchange and wallet data, and clearly documenting your approach.

You do not need perfection. You need evidence, logic, and honesty.

In my experience, crypto valuation problems are rarely about crypto itself. They are about record keeping and confidence. Once those are addressed, the process becomes far less intimidating.

In my opinion, treating crypto like any other asset from an accounting perspective is the simplest and safest mindset to adopt.

If you would like to explore related investing and crypto guidance, you may find How do I calculate my crypto cost basis and How do I calculate my crypto gains and losses useful. For broader investing context, visit our stocks and shares guidance hub.