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Crypto tax for UK businesses: Corporation Tax, VAT and PAYE.

A company that holds, accepts or pays in cryptoassets is a different taxpayer to an individual. Crypto gains in a company sit in Corporation Tax, not Capital Gains Tax, and a company has no annual exempt amount. The accounting treatment of crypto on the balance sheet, the VAT position when accepting crypto for goods or services, and the PAYE and NIC obligations when paying staff in tokens each need the correct analysis. And from 1 January 2026, platforms must collect transaction data under CARF, so the company's exchange accounts are visible to HMRC from the start of 2027.

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CT, not CGT
Corporation Tax applies to a company's crypto gains, not CGT. A company has no £3,000 annual exempt amount
VAT on the supply
VAT bites on the goods or services paid for in crypto, at sterling value at the time of the transaction. Not on the token exchange itself
15% / £5,000
Employer Class 1 NIC rate and secondary threshold from 6 April 2025 where tokens paid to staff are readily convertible assets

What makes businesses tax different.

Corporation Tax, not CGT, and no annual exempt amount

A company's disposal of cryptoassets falls within Corporation Tax, not Capital Gains Tax. The £3,000 annual exempt amount is an allowance for individuals and does not apply to companies. The CT rates and reliefs that apply depend on the company's profits and the number of associated companies; the rate and balance-sheet treatment require a fact-specific conversation rather than a general figure.

Accepting crypto for goods or services: getting VAT right

Exchanging one token for another is not itself a VATable supply of the tokens. However, VAT bites on the goods and services paid for in crypto, at their sterling value at the time of the transaction. A business that accepts crypto for its products or services must account for output VAT on the supply in the normal way. 'We accept crypto' does not mean 'the transaction is VAT-exempt'.

Paying staff in tokens triggers PAYE and NIC

Where tokens paid to employees are readily convertible assets (broadly, where they can be exchanged for cash), they are treated as earnings. PAYE and NIC apply. Employer Class 1 NIC is charged at 15% above the £5,000 secondary threshold from 6 April 2025. The previous rate of 13.8% above £9,100 applied only up to 5 April 2025.

CARF: company accounts are now visible

From 1 January 2026, UK cryptoasset platforms must collect user and transaction data under the Cryptoasset Reporting Framework. The first report to HMRC covers the 2026 calendar year and must be submitted between 1 January 2027 and 31 May 2027. Company exchange accounts are within scope. The period in which a company's crypto activity was invisible to HMRC is formally over.

How we help businesses.

CT, VAT and PAYE brought together in one engagement

We handle the Corporation Tax position on crypto disposals, the VAT accounting for goods and services paid in crypto, and the PAYE and NIC obligations on token salary payments, as a single engagement rather than three separate conversations. We route balance-sheet measurement questions to the applicable accounting standards and flag where the treatment is fact-specific.

Employer NIC and employment-income compliance on token payments

We assess whether the tokens you pay are readily convertible assets, calculate the PAYE and NIC liability at the correct rates (employer NIC 15% above £5,000 from 6 April 2025), and ensure the payroll accounting is consistent with HMRC's employment-income guidance at CRYPTO42000.

CARF readiness and corporate disclosure

We assess your company's CARF exposure, identify any prior-year Corporation Tax or other liabilities that may be surfaced when platform data reaches HMRC from early 2027, and manage voluntary disclosure where it reduces penalties. The dedicated HMRC cryptoasset disclosure service is available to companies as well as individuals; unprompted disclosure consistently achieves lower penalty rates than prompted disclosure.

Common questions

How is crypto taxed in a limited company?
A company pays Corporation Tax on gains from cryptoasset disposals, not Capital Gains Tax. There is no £3,000 annual exempt amount for companies. The applicable CT rate and any reliefs depend on the company's total profits and the number of associated companies; the specific figures need a fact-specific assessment rather than a general answer.
Do we charge VAT if we accept crypto for our products?
VAT applies to the goods or services you supply, not to the method of payment. If you supply VATable goods or services, output VAT is due, calculated on the sterling value of those goods or services at the time of the transaction. Accepting crypto does not make the supply VAT-exempt. The token exchange itself is not a VATable supply of the tokens.
Can we pay staff or contractors in crypto?
Yes, but where the tokens are readily convertible assets, the payment is treated as earnings, and PAYE and NIC apply in the same way as a cash salary. The assessment of whether tokens are readily convertible is the key question; we assess that on the specific tokens and the terms of payment.
What is the employer NIC cost of paying staff in tokens?
Employer Class 1 NIC is charged at 15% on the value of readily convertible asset tokens above the £5,000 secondary threshold per employee, from 6 April 2025. The previous rate of 13.8% above £9,100 is no longer current.
Does CARF apply to our company's exchange accounts?
Yes. UK cryptoasset platforms must collect user and transaction data from 1 January 2026, covering transactions in the 2026 calendar year. The first report to HMRC must be submitted between 1 January 2027 and 31 May 2027. Company accounts held on in-scope platforms are included.
We hold crypto on our balance sheet. How is it accounted for?
The accounting treatment, including whether crypto is recognised as an intangible asset, inventory, or at fair value, depends on the applicable accounting standard and the specific nature of the holding. This is a fact-specific question that requires a conversation about your company's circumstances and the applicable standard, rather than a general rule.

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