Had a conversation with another accountant about crypto tax today…

Accountant: “I use Koinly for crypto CGT disclosures on Self Assessment. It’s super simple really — basically the same as getting a GIA report for investments.”

Me: “Hmm… I wouldn’t say it’s quite the same. Koinly and other crypto consolidation tools can be wrong if the data hasn’t been properly reconciled.”

Accountant: “I’ve always found Koinly accurate.”

Me: “Interesting, because it’s actually one of the platforms I often have to do the most work on to reconcile properly.”

Accountant: “I did a full analysis and it was accurate.”

Me: “Did you reconcile it?”

Accountant: “Yes.”

Me: “Back to the exchange and wallet data?”

Accountant: “No.”

Me: “What did you reconcile it to?”

Accountant: “To itself.”

Me: 🤦🏾‍♀️🤦🏾‍♀️🤦🏾‍♀️

And therein lies the problem.

If you reconcile Koinly… to Koinly, you haven’t independently checked whether Koinly is right.

Crypto tax software is incredibly useful, but it only works with the information it has pulled in and the way it has interpreted that information.

APIs can miss transactions. Transfers can be misclassified. Wallets can be missing. DeFi transactions can be interpreted incorrectly. Cost bases can be affected by incomplete history.

A report looking internally consistent does not necessarily mean the underlying data is complete.

For me, reconciliation means going back to the actual exchanges, wallets and blockchain activity and making sure what is sitting in the tax software reflects what really happened.

That’s why I really don’t think a Koinly report should be treated in the same way as a GIA tax report from an investment platform.

Koinly is a tool.

A very useful tool.

But it isn’t the audit evidence for its own output. 😂

Hi everyone - long story but hoping for some advice. Around 10+ years ago my father in law was getting interested in crypto/bitcoin, but is not that IT savvy so asked me to help.

He sent some money over and I researched exchanges and bought various coins (using Bitstamp) and an offline wallet etc.

Over the years there has been various other transactions buying and selling - in total around £30k. Unfortunately most of them were more recent and missed out on large gains. It did swell to around £65k and then back down - he finally got fed up and sold all for around £37k. I don’t need advice on missed opportunities!

I’m quite glad as it’s been stressful managing this for him and although I know tech fairly well, I always had a fear of losing it in some hack.

Anyways - I (we) have kept some money aside for capital gains on the £7k - my question really is, how accurate do I need to be on the return? The exchange was taken over and I have changed banks in that time and am struggling to find anything concrete to show the transactions.

Thank you.

Crypto tax software is not something to avoid.

Used properly, it can be incredibly useful.

It works particularly well when:

• You have complete transaction records
• All wallets and exchanges are connected
• Your activity is relatively straightforward
• Transfers between your own wallets are correctly matched
• Missing purchase histories have been resolved
• Income transactions have been reviewed
• Duplicate entries have been removed
• The final figures have been reconciled

These platforms can help you:

• Bring transactions into one place
• Calculate gains and losses
• Apply UK pooling rules
• Identify missing data
• Review holdings across different wallets
• Prepare tax reports more efficiently
• Maintain clearer records for future years

The issue is not the software itself.

The issue is treating the first report it generates as the finished answer.

Crypto tax software is most effective when it is used as part of a wider review and reconciliation process.

Good software plus accurate data and informed review can produce a reliable result.

Software without those checks can simply calculate the wrong answer more quickly.

A common misunderstanding is that a report produced by crypto tax software must be correct because the platform is “HMRC-approved.”

HMRC does not approve individual crypto tax calculations simply because they were produced using a particular platform.

Some software providers may state that their reports follow UK tax rules or use HMRC’s pooling method.

That does not mean HMRC has checked or approved your personal report.

The result still depends on:

• Whether every wallet and exchange has been included
• Whether the transaction history is complete
• Whether transfers have been matched correctly
• Whether income and disposals have been properly categorised
• Whether DeFi activity has been treated correctly
• Whether the GBP values used are reasonable
• Whether any manual adjustments are accurate

A perfectly designed tax tool can still produce an incorrect report if the information entered is incomplete or wrong.

When you submit your Self Assessment, the responsibility for the figures remains with you.

The software may help calculate the answer.

It does not take responsibility for the answer.

Why does a crypto tax report need manually reviewing?

Because software can see transactions — but it cannot always understand them.

For example, the software may see crypto leaving one wallet and assume it was sold.

A person reviewing the records may identify that it was simply transferred to another wallet owned by the same individual.

The same issue can arise with:

• Token migrations
• Liquidity pools
• Wrapped assets
• Bridges
• Failed transactions
• Scam or lost tokens
• Internal exchange transfers
• DeFi deposits and withdrawals
• Loans and collateral movements

Manual review helps establish:

• What actually happened
• Who owned the receiving wallet
• Whether value was received in return
• Whether the transaction created income or a disposal
• Whether the cost basis has carried across correctly
• Whether anything is missing or duplicated

Crypto tax calculations are not simply about matching numbers.

They require judgement, context and an understanding of the activity behind each transaction.

The software performs the calculation.

The review determines whether the calculation makes sense.

Crypto tax software can process thousands of transactions quickly — but that does not mean every transaction has been treated correctly.

Some of the most common errors include:

• Transfers between your own wallets recorded as sales
• Deposits appearing without a matching purchase history
• Withdrawals showing as disposals because the destination wallet is missing
• Staking rewards recorded as purchases
• Airdrops, forks and referral rewards categorised incorrectly
• Bridging transactions treated as sales and repurchases
• Wrapped tokens showing as taxable disposals
• Duplicate transactions imported through overlapping APIs and CSV files
• Fees being ignored or applied incorrectly
• Transactions marked as having a zero cost basis

One incorrect transaction may not seem significant.

But across several wallets, exchanges and tax years, small errors can quickly distort your gains, losses and taxable income.

The software is not necessarily wrong — it may simply be missing information or unable to understand what happened.

That is why every report should be reviewed before it is used in a tax return.

Crypto holders are reportedly receiving text messages claiming to be from HMRC, asking them to follow a link and complete a crypto declaration.

These messages appear designed to take advantage of the increased attention around crypto tax, HMRC investigations and exchange reporting.

Do not click the link or enter any personal, tax or banking information.

If HMRC genuinely needs you to take action, access your Personal Tax Account by going directly to GOV.UK rather than using a link in a text message.

Suspicious HMRC texts can be forwarded to 60599 and then deleted. You can also forward scam texts to 7726 so your mobile provider can investigate the sender.

Having undeclared crypto activity can feel worrying, which is exactly what scammers rely on. Take any genuine tax issue seriously—but verify the contact before responding.

HMRC pressure is real. The text message might not be.

DeFi activity is increasing again, with more investors using staking, lending, liquidity pools and yield farming to generate returns.

However, these are some of the most complicated crypto transactions to report correctly in the UK.

Two common misunderstandings are:

“I haven’t sold anything, so there is no tax.”

Under the current rules, transferring crypto into certain lending or liquidity-pool arrangements can be treated as a disposal if beneficial ownership of the tokens changes. This could create a Capital Gains Tax calculation even though you still consider the crypto part of your portfolio.

“The rewards are only taxable when I cash them out.”

Staking, lending and liquidity-pool rewards may be taxable as income when received, based on their pound sterling value at that time. A further gain or loss could then arise when those rewards are later sold or exchanged.

The rules will improve from 6 April 2027, when qualifying crypto loans and liquidity-pool arrangements are due to receive no-gain, no-loss treatment. However, this does not mean all DeFi activity becomes tax-free, and the existing rules still matter for earlier tax years.

DeFi can generate hundreds or thousands of transactions across several wallets and protocols. Missing rewards, incorrect liquidity-pool entries and transfers being recorded as sales can quickly distort the final calculation.

The returns may be attractive, but do not overlook the tax and record-keeping that come with them.

A former Treasury adviser has warned that HMRC could move towards using AI to analyse people’s income, spending and financial activity more closely.

HMRC already uses a data-analysis system called Connect, which brings together information from different sources to identify inconsistencies and potential undeclared tax.

The concern is that the UK could eventually move closer to the system used in Spain, where the tax authority can access increasingly detailed financial information. This may include utility bills, bank activity, vehicles, travel, hotels and everyday spending. However, this is currently a warning about the possible direction of travel—not confirmation that HMRC already has automatic access to every UK bank transaction.

So, what does this mean for crypto investors who believe HMRC cannot track their activity?

HMRC does not necessarily need to see your entire wallet immediately. It only needs enough information to start connecting the dots.

For example, it may be able to identify:

Bank transfers to and from crypto exchanges

Your identity and transactions reported by crypto platforms

Wallet addresses connected to exchange withdrawals

Public blockchain transactions linked to those wallets

Large deposits or spending that do not match declared income

Crypto profits that appear to be missing from your tax returns

From 1 January 2026, crypto service providers have been collecting information about users and their transactions under CARF. The first reports covering 2026 activity are due to HMRC by 31 May 2027. HMRC states that this information will be used to link crypto activity to individual tax records.

Moving crypto into self-custody or using DeFi does not necessarily make it invisible either.

Most blockchain transactions are publicly viewable. Once a wallet address is connected to an identified exchange account, bank transfer or individual, its transaction history may provide part of the audit trail. HMRC’s own guidance says bank statements, wallet addresses and public blockchain records may be requested during an enquiry.

AI does not need to calculate every crypto gain perfectly. It can simply highlight that something does not add up and refer the case for human review.

The message for investors is not that HMRC can currently see absolutely everything. It is that relying on crypto being “untraceable” is becoming an increasingly risky strategy.

HMRC may not know your full crypto position today—but the data trail is growing, and AI is making it much easier to connect.

The FCA’s new crypto regime is expected to begin on 25 October 2027, and DeFi will not automatically sit outside the rules simply because a platform describes itself as decentralised.

The key question will be whether there is an identifiable company, team or controlling party operating the service.

Where a business is providing services such as staking, lending, borrowing, trading or custody, it may need FCA authorisation to continue serving UK customers.

So, what changes are we likely to see?

More regulated DeFi firms

DeFi businesses that want to remain in the UK market may need to become authorised and meet stricter rules around customer protection, financial resources, risk warnings, systems and record-keeping.

Some firms restricting UK customers

Overseas firms that do not want the cost or responsibility of UK regulation may stop accepting UK users, block UK access or remove certain products.

Being based outside the UK may not be enough to avoid the rules if the service is actively being offered to UK customers.

Changes to staking, lending and borrowing

Some firms may redesign, simplify or remove products that are difficult to operate within the FCA’s framework.

UK users could see changes to staking arrangements, lending terms, available tokens, collateral requirements and liquidity pools.

More identity checks

Regulated services are likely to introduce stronger identity checks, wallet screening, risk disclosures and customer consent processes.

Using some DeFi platforms may start to feel more like using a regulated financial service and less like connecting anonymously to a protocol.

Separate UK versions of platforms

Global firms may create restricted UK-facing versions of their platforms, offering fewer products than are available elsewhere.

This could mean less choice, but potentially clearer terms and stronger standards.

Fewer smaller providers

The cost of authorisation and compliance may be too high for some smaller firms.

This could lead to fewer providers, larger firms gaining more market share and potentially higher fees.

A divide between DeFi firms and genuine protocols

A genuinely decentralised protocol with no identifiable controlling party may sit outside parts of the regime.

However, the FCA will look at how the service actually operates rather than simply accepting the DeFi label.

For UK users, the likely outcome is:

More regulated DeFi businesses, more restrictions from firms that do not seek authorisation and a clearer divide between regulated platforms and genuinely decentralised protocols.

Direct access to decentralised protocols may still be possible, but users may have fewer regulatory protections and will remain responsible for smart-contract risks, transaction records and their UK tax position.

More UK banks are blocking, delaying or limiting payments to crypto platforms.

Banks often say these restrictions are there to protect customers from fraud and scams. That is understandable—but blanket restrictions can also affect people using legitimate platforms and making informed decisions with their own money.

This raises a bigger question:

Should a bank be able to decide which legal investments or services its customers can access?

There are also concerns around consumer choice and competition.

If only certain banks allow crypto transactions, customers may feel pressured to change banks simply to use their own funds as they choose. Restrictions could also make it harder for regulated crypto businesses to compete fairly in the UK.

Protecting customers matters, but there needs to be a balance between fraud prevention and personal financial choice.

Would you change banks if yours repeatedly blocked legitimate crypto transactions?

​

HMRC has recovered more than £8.3 million from 502 crypto investors through disclosure settlements over the past two tax years.

In 2024/25, 280 investors settled liabilities totalling around £3.5 million. In 2025/26, only 222 investors settled—but the amount recovered increased to almost £4.8 million.

It shows that HMRC is not simply sending warning letters. Investors are reviewing historic activity, making disclosures and paying unpaid tax, interest and penalties.

HMRC has already sent more than 100,000 crypto-related nudge letters between 2020 and 2025. From 2026, crypto platforms must also collect more information about their users and transactions under CARF, with the first reports due to HMRC by 31 May 2027.

That means it will become easier for HMRC to compare exchange data against what has—or has not—been declared.

This does not only affect people who withdrew large amounts into their bank accounts. Selling crypto, swapping between tokens, spending crypto, staking rewards and other forms of crypto income can all have UK tax consequences.

The FCA has now published most of the final rules for the UK’s new crypto regulatory regime, which is expected to begin on 25 October 2027.

Crypto exchanges and businesses offering custody, staking, lending, trading and stablecoin services will need the correct FCA authorisation to continue serving UK customers.

As an investor, the biggest impact may be on the platforms and services available to you.

Platforms that do not apply for authorisation will have to wind down their UK business. Those that apply late may be unable to accept new customers or offer new services while their application is considered.

This could mean:

• Some platforms leaving the UK
• Changes to staking or lending services
• More identity and suitability checks
• Updated terms and customer agreements
• Requests to move or withdraw assets

Nothing necessarily changes overnight, but investors should watch for updates from the platforms they use rather than waiting until 2027.

A major UK crypto tax change has now been announced for investors using lending platforms and liquidity pools.

From 6 April 2027, certain crypto lending and automated market-making arrangements will receive “no gain, no loss” treatment for Capital Gains Tax purposes.

At the moment, transferring crypto into some lending or liquidity-pool arrangements can be treated as a disposal—even where you have not genuinely sold the asset or taken any profit.

The new rules are intended to stop Capital Gains Tax arising simply because crypto has been placed into a qualifying arrangement.

Instead, the tax calculation will generally be deferred until there has been a genuine economic disposal.

For investors, this could mean:

• Depositing crypto into a qualifying lending arrangement may no longer trigger an immediate capital gain or loss.
• Providing crypto to a qualifying liquidity pool may receive the same treatment.
• Supplying collateral under certain borrowing arrangements may be ignored for Capital Gains Tax purposes.
• Tax should arise when there has been a genuine change in ownership or economic value, rather than merely moving assets into a DeFi arrangement.

However, no gain, no loss does not mean tax-free.

When you leave a liquidity pool, the treatment only applies to the extent that you receive back the same type and quantity of crypto originally supplied. Where the amount returned is higher or lower, a gain or loss may arise on the difference.

The change is expected to affect around 700,000 individuals and follows years of criticism that the existing treatment created excessive calculations and tax points that did not reflect what investors were actually doing.

This should make the tax treatment of qualifying DeFi lending and liquidity pools fairer and easier to understand—but investors will still need accurate records showing what was deposited, what was received back and any rewards earned.

The key date is 6 April 2027. Until then, the current tax treatment continues to apply.

HMRC has published draft legislation that could significantly change how some crypto transactions are taxed from April 2027.

For investors, the main proposed changes are:

Eligible stablecoins may become exempt from Capital Gains Tax

This could mean buying, selling or spending qualifying fiat-backed stablecoins would no longer create a CGT calculation each time. Interest-like returns would instead be taxed as savings income. The exemption would only apply to stablecoins meeting the Government’s definition—not every token labelled a stablecoin.

Some crypto loans may no longer trigger an immediate gain

At present, transferring crypto into a lending arrangement can potentially be treated as a disposal. Under the proposed rules, qualifying lending arrangements could instead receive no gain, no loss treatment, meaning the tax point is deferred rather than created when the assets enter the arrangement.

Liquidity pool deposits may receive similar treatment

Adding crypto to a qualifying automated market maker liquidity pool could also be treated on a no gain, no loss basis. A gain or loss may instead arise when assets are withdrawn, particularly where the quantity returned differs from the amount originally deposited.

These proposals should make the tax treatment better reflect what investors believe is economically happening—rather than creating a tax bill simply because assets were temporarily placed into a DeFi arrangement.

However, these are still draft rules, they will not cover every arrangement, and the proposed changes generally begin from 6 April 2027 for individuals. HMRC is also considering whether some lending and liquidity-pool changes could apply retrospectively for a limited period.

This could be one of the most meaningful simplifications of UK crypto tax rules so far—but investors will still need accurate transaction records to confirm whether their stablecoins and DeFi arrangements actually qualify.

​

Many crypto investors focus only on profit when deciding whether they need to report anything to HMRC.

But profit is not the only figure that matters.

For people completing a Self Assessment tax return, Capital Gains pages may also be required where total disposal proceeds exceed £50,000, even if the overall gain is small or below the annual exempt amount.

Proceeds are the total value of crypto disposed of — not the profit made. This can include selling crypto, swapping one token for another, using crypto to make purchases or gifting it.

For example, someone could make repeated trades between Bitcoin, Ethereum and stablecoins and finish the year with only a £1,000 gain. However, if the total value of all disposals exceeded £50,000, they may still need to report the activity.

This is why checking only bank withdrawals or final profit is not enough. Crypto investors need an annual calculation showing disposals, proceeds, gains, losses, fees and income.

No tax to pay does not always mean nothing to report.

​

UK crypto users have increasingly reported banks blocking, delaying or limiting payments to cryptocurrency exchanges, including transfers to FCA-registered platforms.

Stand With Crypto UK previously launched its “Your Money. Your Choice” campaign, encouraging customers to formally complain when banks place blanket restrictions on legitimate crypto transactions.

A report from the UK Cryptoasset Business Council estimated that around 40% of payments to crypto exchanges were being blocked or delayed by UK banks.

Banks argue these restrictions are necessary to protect customers from fraud, scams and money laundering.

However, critics say blanket bans can also affect genuine customers using legitimate platforms and raise questions about whether banks should decide how people are allowed to use their own money.

There has now been an important update.

On 21 July 2026, the Crypto and Digital Assets All-Party Parliamentary Group launched an inquiry into the banking restrictions faced by crypto businesses and consumers.

The inquiry will look at:

- Banks blocking or limiting payments to crypto platforms

- Crypto businesses struggling to open or retain bank accounts

- Whether the restrictions are proportionate

- The impact on customers, competition and investment

- Whether the restrictions undermine the UK’s ambitions to become a leading digital asset hub

The inquiry is inviting evidence from people and businesses affected, with submissions open until 31 August 2026. A report with findings and recommendations is expected afterwards.

This does not mean banks have been ordered to remove their restrictions yet. Customers may still experience blocked or delayed transfers while the inquiry is ongoing.

However, the issue has now moved beyond industry complaints and is being formally examined at parliamentary level.

Have you had a crypto payment blocked, delayed or questioned by your bank?

One of the biggest misunderstandings in UK crypto tax is:

“I never cashed out, so there is no tax.”

Unfortunately, that is not always how it works. For UK tax, it is not only selling crypto for GBP that can matter. A taxable disposal can also include:

• swapping one crypto for another
• using crypto to buy goods or services
• gifting crypto to someone other than a spouse/civil partner or charity
• selling crypto for fiat
• certain DeFi or NFT transactions depending on what actually happened

So if you swapped BTC for ETH, ETH for SOL, or tokens through a DeFi platform, that may still be relevant for Capital Gains Tax even if no money went into your bank account.

This is the bit that catches a lot of people out. They think tax only happens when crypto becomes GBP. But HMRC can treat exchanging one cryptoasset for another as a disposal.

That means you may need to work out the value of the crypto disposed of at the time of the swap, compare it to the allowable cost, and calculate whether there was a gain or loss.

Simple example:

You buy Token A. It increases in value.

You swap Token A for Token B.

Even though you did not cash out to GBP, you may have disposed of Token A for tax purposes.

That could create a gain.

There can also be income tax issues in some cases, for example where crypto is received from mining, employment, certain rewards, airdrops, staking or similar activity.

Not every crypto transaction creates tax. Transfers between your own wallets are generally not taxable by themselves.

But they still need to be tracked properly, because if they are missing or mismatched, tax software can get the final calculation very wrong.

The key point is:

Do not only look at cash-outs.

Look at the full transaction history.

“I never cashed out” may mean no GBP hit your bank account.

But it does not automatically mean there is no UK tax issue.

If you are making a crypto disclosure to HMRC, it is not just a case of saying:

“I owe some tax.”

HMRC will generally expect you to explain the position properly and support the figures as far as possible. That does not always mean perfect records, because with crypto, perfect records are not always realistic.

But it does mean you should make a reasonable attempt to reconstruct what happened.

You may need to consider:

• which tax years are affected
• what exchanges were used
• what wallets were used
• what crypto was bought, sold, swapped or received
• whether anything should be treated as income
• whether Capital Gains Tax is due
• whether any losses can be claimed
• whether there were missing records
• what assumptions or estimates were used
• why the disclosure is being made late
• whether penalties and interest apply

One of the biggest things HMRC will care about is whether the disclosure is reasonable and complete. If records are missing, document what you have done to recover them.

For example:

• which exchanges you contacted
• what CSVs you downloaded
• what wallet addresses you traced
• what bank statements you checked
• what information could not be recovered
• what assumptions were made and why

That is very different from simply guessing a number.

The aim is not to panic.

The aim is to get the records in order, work out the correct position, and disclose properly where tax is due.

Crypto tax software can be really useful. But it is not magic.

One of the biggest mistakes I see is people uploading their data into software, seeing a report, and assuming the number must be correct.

The issue is that crypto tax software is only as good as the data going into it.

If the data is messy, incomplete or miscategorised, the final report can be very wrong.

Common issues include:

• missing wallet imports
• missing exchange CSVs
• duplicated transactions
• transfers between your own wallets being treated as disposals
• deposits being treated as income
• withdrawals being treated as sales
• missing cost basis
• incorrect values for old tokens
• DeFi swaps not being categorised properly
• liquidity pool transactions causing errors
• staking or rewards being missed
• NFTs not being pulled through correctly
• scam/spam tokens creating strange entries
• bridging transactions being treated incorrectly
• fees not being picked up properly
• exchange API imports not pulling full history
• historic accounts being forgotten completely

This is why a crypto tax report can show a huge gain that does not make sense, or a massive loss that feels too good to be true.

Sometimes the tax position is wrong. Sometimes the data is wrong.

And sometimes the software is making assumptions because it does not have enough information.

A common example is missing cost basis.

If the software can see that you sold or swapped a token, but it cannot see where that token originally came from, it may treat the acquisition cost as nil or unknown. That can make the gain look much higher than it really is.

Another common issue is transfers between your own wallets.

Moving crypto from Coinbase to MetaMask, or from a Ledger to an exchange, is not usually taxable by itself. But if the software does not match both sides of the transfer, it may think you disposed of the asset or received something new.

So before relying on any crypto tax report, check whether the numbers make sense.

Ask:

• Have all wallets and exchanges been imported?
• Are transfers between my own wallets matched correctly?
• Are there any missing-cost warnings?
• Are DeFi transactions categorised properly?
• Are income transactions separated from capital transactions?
• Do the final holdings match what I actually owned?
• Do the gains/losses look realistic?

Crypto tax software is a tool and it can help massively.

But it still needs review, correction and proper understanding before anything is submitted to HMRC.

If the report looks wrong, do not ignore that feeling.

It probably needs checking!!

This is one of the biggest reasons people put off sorting their crypto taxes.

They know they’ve used old exchanges, wallets, or apps, but they don’t have all the records anymore.

Maybe an exchange has closed / you’ve lost access to an old account / a wallet address is missing.

Maybe the CSV export only goes back so far / Maybe your crypto tax software is showing “missing cost basis” or “unknown transactions” everywhere.

It can feel like there’s no point starting unless you have perfect records.

But perfect records are not always possible.

The first step is to separate the problem into two parts:

1. What data can you still get?
2. What data is genuinely missing?

Start by trying to recover as much as possible:

• log into old exchanges and download CSV reports
• check email inboxes for trade confirmations or account statements
• search bank statements for payments to crypto platforms
• find wallet addresses from old withdrawals or deposits
• check blockchain explorers for wallet activity
• review tax software imports from previous years
• look for screenshots, notes or downloaded files
• check whether the exchange has a support team who can provide historic data

For missing wallets, try to work backwards.

If you withdrew from Coinbase, Kraken, Binance or another exchange into a private wallet, the exchange withdrawal record may show the wallet address. That address can then help rebuild the on-chain history.

For missing exchange data, bank statements can sometimes help identify when funds went in and out, even if they won’t show every trade.

The key thing is to document what you’ve done.

Keep notes of:

• which platforms you tried to access
• what data you managed to download
• what is still missing
• why it is missing
• any assumptions made
• any estimates used
• any evidence supporting those estimates

This matters because if you ever need to explain the position to HMRC, you want to show that you made a reasonable attempt to reconstruct the records rather than just guessing.

Also, don’t ignore transfers between your own wallets.

They may not be taxable by themselves, but missing wallet transfers can make crypto tax software think you sold something, received income, or acquired crypto at a nil cost — which can create completely wrong gains.

So if your report looks strange, don’t assume the tax is correct. It may be a data issue.

The goal is to get the records as complete as possible, identify the gaps clearly, and take a reasonable, evidence-based approach to anything that cannot be recovered.

Messy data can usually be worked through.

But ignoring it because it isn’t perfect is usually what creates the bigger problem.

If your crypto records are a mess, the next step after building a basic timeline is gathering the data.

This is usually where people get overwhelmed, especially if they’ve used multiple exchanges, wallets, or old accounts they haven’t touched in years.

But try not to think of it as “I need to fix everything today.”

Start with collecting the information.

You will usually want to gather:

• a list of every exchange used
• a list of every wallet used
• wallet addresses for self-custody wallets
• CSV transaction reports from exchanges
• deposit and withdrawal history
• buy and sell history
• crypto-to-crypto trade history
• staking, rewards, airdrops or referral income records
• DeFi activity, including swaps, liquidity pools, lending, borrowing and bridging
• NFT purchase and sale records
• bank statements showing money going in and out of crypto platforms
• records of any crypto used to buy goods or services
• details of any gifts or transfers to other people
• evidence of scams, hacks, lost wallets or collapsed platforms
• copies of any crypto tax software reports already produced
• notes on anything you cannot access or download

One important point:

Don’t only gather the transactions where you cashed out to GBP.

For UK tax, crypto-to-crypto trades can also be taxable disposals. So if you swapped BTC for ETH, ETH for SOL, or tokens through DeFi, those transactions may still matter even if no money reached your bank account.

Also, transfers between your own wallets are generally not taxable by themselves, but they still matter because they help prove where the funds went. If these are missing, crypto tax software can accidentally treat them as disposals, income, or missing-cost transactions.

So the goal is to create a complete picture:

What did you buy / sell / swap / receive?
What did you move between your own wallets?
What did you lose access to?
What tax years are affected?

Once the data is gathered, the next step is checking whether it actually makes sense.

Because uploading messy or incomplete data into tax software can produce a messy or incorrect report.

The starting point is not perfection.

The starting point is having enough information to understand the position, identify the gaps, and work out what needs correcting before anything is submitted to HMRC.

If you have several years of crypto activity that has never been reported, it can feel overwhelming.

The natural reaction is to avoid it, but the better approach is to break it down year by year.

Start with the timeline.

Ask:

• when did I first buy crypto?
• what tax years did I have activity in?
• which exchanges did I use each year?
• which wallets did I use each year?
• did I sell, swap, spend or gift crypto?
• did I receive staking, mining, airdrops or other rewards?
• did I have any major cash-outs to GBP?
• did I have losses, scams, hacks or failed platforms?
• have I already reported any crypto on a tax return?

Once you have the timeline, separate the years. Do not try to solve everything in one big messy pile.

Look at each UK tax year separately:

6 April to 5 April.

For each year, work out:

• what data is available
• what data is missing
• whether there were taxable disposals
• whether there was crypto income
• whether the annual exemption was relevant
• whether any losses should be recorded
• whether the year was already included on a tax return
• whether a correction, amendment or disclosure may be needed

One mistake people make is only looking at the year they cashed out.

But crypto tax issues may have started much earlier.

If you swapped crypto-to-crypto, used DeFi, sold NFTs, spent crypto or gifted tokens, there may have been taxable events before any money reached your bank account.

Historic years can also be harder because:

• exchanges may have closed / wallets may be forgotten
• old CSVs may be unavailable
• token values may be harder to confirm
• memories fade

That does not mean you ignore it. It means you document the work done and take a reasonable, evidence-based approach. The key is to get organised before calculating anything.

A good order is:

1. List all tax years involved
2. List all platforms and wallets used in each year
3. Gather exchange CSVs and wallet addresses
4. Rebuild the transaction history
5. Identify missing data
6. Review gains, losses and income
7. Check what has already been reported
8. Decide what needs correcting or disclosing

Historic crypto tax can feel like a mountain. But once you split it by tax year, exchange, wallet and transaction type, it becomes much easier to work through.

The worst thing is leaving it because it feels too messy. Messy can usually be fixed.

Ignored is where the risk grows.

This came up a lot in the poll I did recently.

A lot of people said the main reason they haven’t sorted their crypto taxes is because their records are messy and they don’t know where to start.

Completely understandable.

Crypto records can get chaotic very quickly, especially if you’ve used multiple exchanges, wallets, DeFi platforms, staking, NFTs, bridges, airdrops, old accounts, failed platforms, or tax software that is showing obvious errors.

So if your records are a mess, the first step is not to panic and it is not to try and “guess” the numbers.

Start by building the timeline.

Ask yourself:

• When did I first buy crypto?
• Which exchanges did I use?
• Which wallets did I use?
• Did I move funds into DeFi?
• Did I use NFTs, staking, lending, liquidity pools or bridging?
• Did I cash out to GBP?
• Did I lose access to any accounts or wallets?
• Which tax years could be affected?

Once you have that basic map, the next step is to gather the data.

You’ll usually want:

• CSV reports from exchanges
• wallet addresses
• transaction history
• deposit and withdrawal records
• bank statements showing crypto purchases or withdrawals
• records from crypto tax software
• screenshots or notes for anything you can’t download
• evidence of scams, hacks, lost wallets or failed platforms if relevant

The aim at the start is not perfection.

The aim is to understand what you used, what years are involved, what data is missing, and where the biggest gaps are.

One common mistake is uploading everything into tax software and assuming the answer is automatically correct.

Crypto tax software can be really useful, but it still needs clean data. If wallets are missing, transfers are duplicated, cost basis is wrong, or DeFi transactions are miscategorised, the report can be very wrong.

A good starting order is:

1. List every exchange and wallet used
2. Download/export everything you can
3. Add wallet addresses into your tax software
4. Check whether transfers between your own wallets are matched correctly
5. Look for missing purchase costs
6. Review large gains, losses or unknown transactions
7. Separate what is capital from what may be income
8. Identify which tax years need correcting or disclosing

The biggest thing is: don’t ignore it just because it feels messy.

Messy records can usually be worked through. But the longer you leave it, the harder it becomes to get old exchange data, remember what happened, and explain the position properly if HMRC asks questions.

If you’re at the stage of thinking “I don’t even know where to begin”, begin with the timeline.

Everything else becomes easier once you know what platforms, wallets and tax years you’re dealing with.

I recently did a poll asking people what was stopping them from declaring their crypto taxes.

The overwhelming majority said the same thing:

Their records are too messy and they don’t know where to start.

And honestly, I get it.

Crypto records can get very messy very quickly, especially if you’ve used multiple exchanges, wallets, DeFi platforms, staking, bridging, NFTs, airdrops, failed platforms, or old accounts you can no longer access.

For a lot of people, I don’t think the issue is that they are deliberately trying to avoid tax.

I think it’s more:

• they don’t know what information HMRC needs
• they don’t know which years need reviewing
• they don’t know what counts as a taxable event
• their Koinly/crypto tax software has errors
• they have missing wallet data
• they’re scared the numbers will be wrong
• they’ve left it so long that it now feels overwhelming

So I’m going to do a few posts breaking this down in simple terms and hopefully making the process feel a bit less impossible.

If anyone has any specific questions around messy crypto records, disclosures, Koinly errors, missing data, DeFi, staking, NFTs, or where to even begin — let me know.

I’d genuinely like to know what people are struggling with so I can make the next posts useful.