How to Submit Cryptocurrency to HMRC?

If you need to report and pay Capital Gains Tax, you can either:

• Complete a Self Assessment tax return at the end of the tax year.
• Use the Capital Gains Tax real-time service to report it straight away.

 

This can all be done from the government gateway, or you can file by post.

It’s important to remember the amount of tax due might differ if you are not a UK resident. Also, if you complete a tax return, you must complete it in pound sterling.

Calculate Your Taxes

Whether you earn income or capital gains, the first step is always to calculate your cryptocurrency taxes. You must calculate your capital gains, losses, and income for the tax year. You can do this manually or use the Cryptiony app, which will do it for you.

If you use the Cryptoiony app, all you need to do is to add your exchange accounts and connect your blockchain wallets, and we will take care of the rest.

However, if you choose to do it manually, you need to calculate profits and losses based on the time you received the coins compared to when you disposed of them. This can be a lengthy and complicated process, as you often have many crypto transactions throughout the year. This is why using the Cryptiony app is always a fantastic choice!

 

Once you have calculated your taxes, the next step is to register with HMRC. You can either do this online or by post.

Register With HMRC Online

You do not need to follow this step if:

• You will submit your Self Assessment tax return by post (in that case, your submission deadline is brought forward to 31st October).
• You have submitted a Self-Assessment tax return online before.

But if neither of these factors applies to you, you must register with HMRC online.

To register with HMRC online, you will need a Unique Tax Reference (UTR). To get this, visit the government website and then complete the questions. Once you have completed it, HMRC will create your account, and you will receive your UTR within ten days. Ensure you keep this number safe, as you will need it in future.

Next, you will receive an activation code that you can use to activate your HMRC online account.

Register By Post

If you prefer to register with HMRC by post, you will still need access to a PC or other electronic device. You need to download and print a registry form. Once you have printed it, fill it in and post it to HMRC. They will then send your UTR, which you will receive within ten days.

Report Capital Gains With SA108

The SA108 form is where you will report all capital gains, losses, the number of disposals and other key information from the tax year. The SA108 form is self-explanatory. The main thing is that you have correctly attributed the profits to capital gains vs income tax.

The process to complete your SA108 is as follows:

• Visit this link.
• Select the year you are filing for.
• Download the document.
• Print it.
• Fill it in.
• Attach it to your Self Assessment SA100 (see the next section).
• Post to HMRC.

Report Income Tax With SA100

The SA100 is used to report profits which are subject to income tax. The SA100 is the main form for Self Assessment. Other forms, such as the SA108, are known as “supplementary forms” and should be attached to the SA100 when you send it off to HMRC.

The SA100 completion process is the same as that for the SA108. But remember, if you file by post, the deadline is brought forward to the 31st of October. Check out the FAQs at the bottom of this article for more information on deadlines.

The other option would be to fill out the SA100 online. You can do this directly on the HMRC website.

HMRC has a fantastic guide if you would like a detailed explanation of each box’s meaning for the SA100 sheet. It’s also a great help if you get confused when carrying out your tax return. You can view it here.

Other than in exceptional circumstances, you will not need to fill in any supplementary income forms other than SA108 for crypto earnings. But here are the others, so you can check whether any do apply to you:

• SA101 – additional information
• SA102 – employment
• SA103 – self-employment
• SA104 – partnership
• SA105 – UK property
• SA106 – foreign income
• SA107 – trusts

File Your Tax Return

If you carried out your Self Assessment Tax Return online, all you need to do is hit the submit button. If you printed to form out, just attach all supplementary sheets and post them to the address given by HMRC.

In either case, following submission, HMRC will calculate the taxes you owe and notify you by post. If your previous tax bill is settled, you can pay the amount you owe in instalments. Just remember that HMRC does charge interest on unpaid debts.

Filing Your Tax Return FAQs

• What if I make a mistake on my tax return?

If a mistake was made on your tax return, you could revise it. However, tax return errors can only be fixed within 12 months of filing the return. If you submitted your tax return online, you should submit the amendment online. And if you submitted via post, you should submit the amendment by post.

Following the amendment, you have up to four years to claim overpayment relief if you believe you have paid or are due to pay too much tax.

On the other hand, the amended tax return could show you owe more tax. In this case, HMRC will issue a “determination”, which states the new amount of tax you owe. You have 12 months from the determination to pay.

• When do I need to file my Self Assessment tax return

For the tax year of 6th April 2021 to 5th April 2022, the deadlines are as follows:

Register for Self Assessment: 5th October 2022.

Submit by post: 31st October 2022.

Submit online: 31st January 2023.

If you miss the deadline or do not file for a year you were supposed to, then you may have to pay a penalty. There is more about this in the next FAQ. 

• What is a late filing penalty, and can I appeal it?

A late filing penalty comes when you miss a deadline or do not file a tax return for a year you were supposed to. You will also receive a penalty if you are late paying your bill.

If you are three months late to file or pay your bill, the penalty is £100. And the penalty continues to rise if you are later.

When it comes to appealing a penalty, HMRC states you can appeal it if you have a “reasonable excuse”. To appeal a penalty, you can do it online using the HMRC government gateway or by post.

Some reasonable excuses HMRC allow in an appeal are: if a relative has passed away, you were in hospital or was seriously ill, you had technical issues, or a flood or fire stopped you from filing your tax return. There is a complete list of excuses allowed by HMRC on their website.

However, some excuses that HMRC would not class as reasonable are: if your cheque bounced, if you did not know how to use the HMRC site, if you did not receive a reminder to file your taxes or if you made a mistake on your tax return.

• How do I know if I need to file a tax return?

You need to file a tax return if you earned over £1000 before any tax relief. If unsure, you can use this tool to check whether you need to file a tax return.

• How do I pay HMRC?

You can pay HMRC in one lump sum or split the fee and pay weekly or monthly. You can pay HMRC through direct debit, cheque, online banking or over the phone. But providing you meet some conditions, HMRC will deduct what you owe from your PAYE tax code.

If HMRC does deduct the taxes you owe from your PAYE code, they will do so in equal instalments over 12 months.