CryptoTax UK · Guide
Getting paid in crypto: how HMRC taxes it
Whether your employer pays you in Bitcoin, a client sends you USDC, or a DAO rewards contributors in tokens — HMRC treats all of these as taxable income at the point of receipt. And when you later sell or swap those tokens, CGT applies too. This guide covers both layers of tax. Educational only — not tax advice.
Calculate my crypto income tax →Employment income paid in crypto: PAYE and NI
If you are an employee and your employer pays all or part of your salary in cryptocurrency, HMRC treats the crypto as a readily convertible asset (RCA). This means your employer must deduct Income Tax through PAYE and both employer and employee National Insurance contributions, based on the GBP market value of the crypto on the payment date.
Freelance and self-employment income in crypto
If you are self-employed and a client pays you in crypto for services rendered, the GBP value of the crypto on the date of receipt is your income for Income Tax and Class 4 NI purposes. Report this through the self-employment pages of your Self Assessment. The crypto then acquires a cost basis equal to the income amount declared — relevant when you later dispose of it.
The double tax: income then CGT
Being paid in crypto creates two potential tax events on the same tokens. First, Income Tax on receipt. Second, CGT on disposal if the tokens have increased in value since you received them. Your cost basis for CGT is the income value you already declared — so you are not taxed twice on the same amount, only on the subsequent gain. If the tokens fall in value, you may have a capital loss.
Crypto bonuses and token incentive schemes
Crypto bonuses are treated as employment income in the same way as cash bonuses. Token-based incentive schemes, vesting schedules, and employee token grants are increasingly common and can create complex tax points at grant, vesting, and disposal. HMRC has specific rules for different types of share and token schemes — specialist advice is recommended.
Frequently asked questions
What if I'm paid in a stablecoin like USDC?
The same rules apply. A stablecoin pegged to the US dollar is still a cryptoasset in HMRC's view. The GBP equivalent on the date of receipt is your taxable income. For stablecoins closely pegged to GBP, the value is close to face value, but you should still record the exact GBP equivalent at the time of receipt.
My employer is overseas — who handles the tax?
If your employer is not UK-registered and does not operate UK PAYE, the obligation to account for Income Tax and NI may fall on you personally. You would declare the income through Self Assessment and pay the tax directly. This is an area where professional advice can prevent significant errors.
Can I reduce my tax by delaying the sale of crypto I was paid in?
Delaying the sale does not reduce the Income Tax already due on receipt — that is fixed at the date you received the tokens. It can affect the CGT outcome: if the tokens appreciate before you sell, you have a larger gain; if they fall, you may have a loss to offset elsewhere.
More UK crypto-tax guides
Ready to estimate your UK crypto tax?
Free calculator. No sign-up needed.
Calculate my crypto income tax →Educational guidance only. CryptoTax UK is not a regulated tax adviser and the information above does not constitute tax, legal or financial advice. Always confirm your specific position with HMRC or a qualified accountant before filing.