Missing a crypto tax deadline might seem like a small oversight, but it can lead to serious consequences in the UK. From automatic late filing penalties to mounting interest charges, HMRC doesn’t take unreported crypto gains or income lightly.
Whether you’ve traded, sold, staked, or received crypto through airdrops, you may have a legal obligation to report your activity through Self-Assessment. If you fail, you could face penalties, fines, and in some cases, a formal compliance check.
This article outlines what HMRC might charge you if you forget to file your crypto taxes—and how to minimise the damage if you’ve already missed the deadline.
Is Filing Crypto Taxes Mandatory in the UK?
Yes, if you’ve made profits or earned income through crypto, filing taxes is mandatory. HMRC treats cryptocurrency as property for tax purposes, which means certain crypto transactions are considered disposals and are subject to Capital Gains Tax (CGT) or Income Tax depending on their nature.
You’re required to file a Self Assessment tax return if you’ve sold crypto for a profit, swapped one cryptocurrency for another, spent crypto on goods or services, or received it as income through mining, staking, or airdrops. Even if you only made a small profit or a one-time trade, you must report it if your total gains exceed the annual CGT allowance, which is £3,000 for the 2024–25 tax year.
Failure to file or underreporting crypto gains can lead to penalties and additional scrutiny. HMRC now receives transaction data directly from exchanges, making it easier than ever for them to identify unreported crypto activity.
Read More: Crypto Tax In The UK: The Ultimate Guide
Can HMRC Audit Your Crypto Activity?
Yes, HMRC can audit your crypto transactions if they suspect you’ve underreported or failed to report taxable activity. These audits can take the form of a compliance check or a full investigation, depending on the extent of discrepancies they identify in your tax records.
HMRC has access to transaction data from major crypto exchanges through international information-sharing agreements. This means they can match wallet addresses, trading activity, and fiat conversions against your declared tax filings. If something doesn’t add up, it may trigger further review.
In some cases, HMRC can look back at multiple tax years if they suspect deliberate non-compliance. This could result in higher penalties and interest charges, even if the original crypto disposals occurred years earlier. Being proactive with accurate reporting is the best way to avoid an audit.
Read More: Personal Income Tax On Crypto In The UK
What Happens If You Miss the Crypto Tax Deadline?
If you fail to submit your crypto tax return on time, HMRC will automatically apply penalties, starting with a flat £100 fine. These penalties apply even if you don’t owe any tax, and they increase the longer your return remains unfiled.
For crypto investors, the deadline for submitting your Self Assessment tax return online is 31 January following the end of the tax year. Missing this deadline not only results in fines but can also trigger further interest charges if you have unpaid Capital Gains Tax or Income Tax from your crypto transactions.
In some cases, HMRC may initiate a compliance check if they detect missing or inaccurate information, especially if your activity was visible through centralised exchanges. The longer you delay, the more difficult and costly it becomes to rectify the issue.
HMRC Penalties for Late Crypto Tax Filing
If you miss the deadline to report your crypto activity, HMRC applies late filing penalties in stages. These charges apply whether or not you owe tax and increase the longer your return remains overdue. For crypto investors using Self Assessment, understanding these penalties is essential to avoid unnecessary costs.
£100 Fixed Penalty After the Deadline
If you miss the 31 January deadline to file your tax return online, HMRC issues an automatic £100 penalty. This applies even if you have no tax to pay or are due a refund. It’s a fixed charge for missing the deadline, not based on your income or gains.
Daily Penalties After 3 Months
If your return is more than 3 months late, HMRC begins to charge £10 per day, up to a maximum of £900. These daily penalties are in addition to the initial £100 and continue until you file your return or reach the 90-day cap.
Further Penalties at 6 and 12 Months
At the 6-month mark, HMRC may charge a further penalty of 5% of the tax owed, or £300, whichever is greater. If the return is still unfiled after 12 months, another 5% or £300 penalty is added. In serious cases, higher penalties may apply if HMRC believes the delay was deliberate.
Interest on Unpaid Crypto Tax
If you owe tax from crypto disposals or income and don’t pay by the deadline, HMRC will charge daily interest on the outstanding amount. The current interest rate is around 7.75% annually and begins accruing from 1 February, the day after the payment deadline.
Read More: Personal Tax On Crypto In The UK
What If You Paid Late or Didn't Pay At All?
If you fail to pay your crypto tax bill after submitting your Self Assessment return, HMRC applies separate late payment penalties in addition to any filing penalties. These penalties are calculated as a percentage of the unpaid tax and increase the longer the amount remains outstanding. For crypto investors who owe Capital Gains Tax or Income Tax from their transactions, these charges can accumulate quickly.
After 30 days of non-payment, HMRC imposes a 5% penalty on the amount still due. A further 5% is added after 6 months, and another 5% after 12 months. These penalties are charged alongside daily interest, creating a compounding effect that can significantly raise your total liability if left unresolved. Even if you intend to pay eventually, delaying action can make the overall cost much higher.
In some cases, HMRC may offer a Time to Pay (TTP) arrangement, allowing you to settle your crypto tax debt in monthly instalments. However, this is only granted if HMRC believes you are genuinely unable to pay in full and can stick to the agreed plan. If you miss payments under a TTP agreement, HMRC may take enforcement actions such as recovering funds directly from your bank account or seizing personal assets.
Read More: Capital Gains Tax in the UK
Reasonable Excuses: Can You Appeal the Penalty?
HMRC allows taxpayers to appeal crypto-related penalties if they have a valid reason, known as a “reasonable excuse.” However, not all explanations are accepted. Understanding what qualifies—and how to appeal properly—can help reduce or cancel your penalties.
What Counts as a Reasonable Excuse?
A reasonable excuse is a genuine, unforeseen event that prevented you from meeting your tax obligations. Acceptable reasons may include a serious illness, bereavement of a close relative, unexpected hospital stays, or system-wide technical issues affecting HMRC’s services. The excuse must cover the entire period during which you were unable to comply.
What Doesn’t Qualify as a Valid Excuse?
Certain justifications are not accepted by HMRC. These include forgetting the deadline, not understanding crypto tax rules, or claiming the HMRC website was difficult to use. Being unaware of your filing obligations, such as assuming crypto isn’t taxable, will not be accepted as a defence.
How and When to Appeal?
You typically have 30 days from the date HMRC issues the penalty to lodge your appeal. This can be done online via your Government Gateway account or by writing a signed letter to HMRC. Your appeal must clearly explain the circumstances, include your taxpayer reference number, and provide supporting evidence where possible.
Read More: How Can You Save Crypto Taxes In The UK?
How to Correct a Missed Crypto Tax Filing?
If you’ve missed the deadline to file your crypto taxes, the most important step is to act quickly. HMRC allows you to correct your return, and doing so early can help reduce penalties and prevent further action.
Submit Your Return as Soon as Possible
Even if the deadline has passed, you can still file your Self-Assessment tax return online. Log in to your HMRC account, complete your crypto disclosures, and submit the return without delay. The sooner you file, the more you limit the financial impact of late penalties and interest.
Declare All Crypto Activity Accurately
When correcting a missed return, make sure all crypto-related transactions are included, such as disposals, staking rewards, mining income, and airdrops. Use accurate GBP values at the time of each transaction, and include any past gains or losses. Filing an incomplete or incorrect return may lead to further penalties later.
Use Voluntary Disclosure If It's More Than a Year Late
If you haven’t filed for a previous tax year and HMRC hasn’t contacted you yet, consider using their Digital Disclosure Service to make a voluntary disclosure. This allows you to report unpaid tax and usually results in lower penalties. It’s a proactive approach that demonstrates intent to comply and can work in your favour during HMRC’s review.
Tips to Avoid Crypto Filing Penalties in the Future
Avoiding HMRC penalties starts with proper preparation and awareness. For crypto investors, the fast pace of transactions can make tax reporting feel overwhelming, but a few simple practices can help you stay compliant year-round.
Track Every Transaction From the Start
Crypto tax reporting becomes easier when you record each transaction as it happens. This includes dates, amounts, GBP values at the time of the trade, and associated fees. Whether you’re using exchanges, wallets, or DeFi protocols, having a complete transaction history ensures nothing is overlooked when it’s time to file.
Review Your Tax Position Before the Deadline
Don’t wait until the last week of January to assess your gains or losses. Set aside time before the end of the calendar year to review your crypto portfolio and calculate any potential tax liability. This allows you to harvest losses or make corrections before the filing deadline approaches.
Use a Crypto Tax Calculator to Stay Organised
Manual calculations are prone to errors, especially if you trade frequently or across multiple platforms. Using a crypto tax solution like KoinX can automate the process and reduce your risk of reporting mistakes. It also helps you generate reports that match HMRC’s filing standards, making the submission process more efficient.
How KoinX Helps You Stay HMRC-Compliant?
Keeping up with HMRC’s crypto tax rules can be challenging, especially when you’re managing multiple wallets and frequent trades. KoinX simplifies compliance by helping you automate calculations, track transactions in real time, and generate tax reports that meet HMRC’s standards. Here’s how it works.
Auto-syncs your Wallets and Exchanges
KoinX allows you to securely connect with 300+ wallets, centralised exchanges, and DeFi platforms in just a few clicks. Once connected, your transaction data is automatically pulled into a unified dashboard, eliminating the need for manual entry. This ensures your trading history is complete and accurate—something HMRC expects when you file. Whether you’re using Binance, MetaMask, or staking platforms, KoinX helps maintain a centralised record of your crypto activity, making tax time much easier to manage.
Tracks Capital Gains, Losses, and Income in Real Time
With KoinX, you don’t have to wait until the end of the year to figure out what you owe. The platform continuously calculates your capital gains, losses, and crypto income based on real-time market data and transaction history.
This helps you plan, make smarter trading decisions, and stay on top of your tax position throughout the year. It’s especially helpful if you want to harvest losses before the tax deadline or need to adjust your strategy to remain within the CGT allowance.
Generates HMRC-Ready Tax Reports Instantly
Filing crypto taxes requires reports that clearly show disposals, income, and associated gains or losses—all in GBP. KoinX generates HMRC-compliant tax reports in minutes, giving you everything you need to complete your Self Assessment accurately.
These reports can be downloaded in formats that are compatible with HMRC’s online portal or shared directly with your accountant. By ensuring every detail is in place—from transaction timestamps to fiat values—KoinX helps reduce the risk of penalties due to incomplete or incorrect filings.
So take control of your crypto compliance today—start using KoinX to minimise errors and ensure accurate, timely tax reporting.
Conclusion
Filing your crypto taxes late, or not at all, can lead to costly penalties, interest charges, and even an HMRC investigation. While the process might feel overwhelming, taking action early can significantly reduce the long-term impact and help you stay on the right side of the law.
If you’re unsure where to begin, tools like KoinX simplify the process by tracking your crypto activity, calculating your tax obligations, and generating accurate, HMRC-compliant reports. It’s a practical way to stay organised and avoid penalties in the future.
Frequently Asked Questions
What Is The Penalty For Not Reporting Crypto Taxes In The UK?
HMRC charges a £100 fixed penalty if you miss the Self Assessment deadline. Additional daily penalties apply after three months, and further charges are added at six and twelve months. If you owe tax, interest, and late payment penalties may also apply, making it essential to file as soon as possible.
Will HMRC Know If I Don’t Report My Crypto?
Yes, HMRC receives transaction data from many centralised crypto exchanges under international data-sharing agreements. This allows them to identify undeclared crypto activity. If you fail to report gains or income, HMRC may launch a compliance check or full investigation, especially if your transactions exceed the Capital Gains Tax allowance.
Can I Go To Jail For Not Filing Crypto Taxes?
It’s rare, but in extreme cases of tax fraud or deliberate evasion, HMRC can take legal action. Most penalties involve fines, interest, and repayment plans. Jail time typically applies only if the non-compliance is intentional and involves large sums or repeated offences. Honest mistakes are treated more leniently if corrected early.
How Do I Fix A Missed Crypto Tax Return?
You can still file a late tax return through HMRC’s Self Assessment portal. If it’s over a year late, consider using HMRC’s Digital Disclosure Service for voluntary correction. The sooner you act, the lower your penalties are likely to be. Always ensure all crypto transactions are accurately reported in GBP.
Can I Pay My Crypto Tax Penalty In Instalments?
Yes, HMRC may offer a Time to Pay arrangement if you’re unable to pay in full. This allows you to pay your crypto tax and penalties over monthly instalments. Approval depends on your financial situation and ability to meet the agreed terms. Missing payments could lead to enforcement action by HMRC.
