HMRC clarifies crypto staking tax
09 November 2026
Last November, HMRC issued detailed guidance on the income tax treatment of staking cryptoassets. The guidance, found in the cryptoassets manual, provides a comprehensive overview of the tax implications for individuals who earn cryptoassets through staking activities.
The Taxpayer Will Generally Have to Pay Tax
Generally, staking activity will be taxable and the pound sterling value of cryptoassets awarded at the time of receipt is regarded as income. If the individual keeps the awarded staking assets, and later disposes of them, they may need to calculate and pay Capital Gains Tax on any increase in value since the date of the award.
However, whether this income should be regarded as trading income or miscellaneous income - which can have very different tax consequences - depends on the degree, organisation, risk and commerciality of the individual's activities.
If you are receiving cryptoassets from staking, mining, lending, or employment, this is taxable income. If you are not trading in cryptoassets, HMRC treats these as miscellaneous income.
A key piece of guidance was updated as recently as 9 November 2023. There are three key areas taxpayers need to be aware of.
Staking May or May Not Be a Taxable Trade
What matters is the degree, organisation, risk and commerciality of the individual's staking. This is the policy stated in 2023 in an update to HMRC’s guidance for crypto traders. A fourteen-point checklist is used “to guide the mind”.
If staking activities rise to the level of a trade, staking income will be treated as trading income. If not, the staking rewards will be regarded as miscellaneous income.
- Degree - regularity, frequency, quantity
- Organisation - separate business bank account, dedicated workspaces, employees
- Risk - number of coins subjected to market price fluctuations, fluctuation in coin valuation
- Commerciality - trade name, product or market
- Other factors - opening/closing capital, sophistication, record-keeping, conduct
Miscellaneous Income Has a Tax Allowance
British taxpayers enjoy considerably more tax allowances for miscellaneous income than most others. £1,000 tax-free for those who do not claim the Property Income Allowance. £1,000 threshold in Individual Savings Accounts. Another £1,000 for tax-free savings on income from casual earnings.
If you fail to bring in more than £1,000, you do not need to report anything to HMRC. If your total miscellaneous income exceeds £1,000, but it is less than £2,500, you must submit the additional information HMRC requests within 90 days to avoid losing the £1,000 allowance.
If your total miscellaneous income reaches £2,500, you need to register for self assessment, enter your income from miscellaneous sources, and pay the income tax before the end of the tax year.
Capital Gains also Apply if Sale of Tokens Take Place
When you sell a cryptoasset that does not qualify as an annual tax-free gift, the increase in value after acquiring the original token is subject to Capital Gains Tax.
The £12,300 threshold applies. No capital gains if the result is less than £12,300, over this, you can count this much back into tax-free income.
Careful Record Keeping Is Needed
Unlike most other miscellaneous income, proof of crypto income is essential. For this reason, before engaging in taxable activities, you need to keep records of banking statements, transaction details, proof of disposal, and tax payments.
If you're new to taxable crypto activity, a good idea is to set up a spreadsheet before you start, and enter every token you're given. Check it regularly to make sure you have the updated pound sterling values. Over £12,300 per year, signing up for self-assessment is advisable.
HMRC's Cryptoassets team regularly updates its guidance. The cryptoassets manual contains all UK tax requirements, from Personal Allowance to limited companies holding cryptoassets. Every detail you need to comply with tax obligations.
