Understanding UK Self-Assessment Tax Returns — And Why Declaring Crypto Gains Matters

Whether you’re self-employed, a side hustler, a landlord, or someone dabbling in crypto or stocks — if you're earning income outside of your main job, chances are you need to file a UK Self-Assessment tax return.

With the 2024/25 tax year behind us, now’s a great time to understand how Self-Assessment works, what you need to declare, and how you can legally reduce your tax bill — especially if you’ve made gains in crypto.

What Is a Self-Assessment?

A Self-Assessment is HMRC’s way of collecting tax on income that isn’t automatically taxed (like a salary via PAYE). You submit an online return each year summarising your income, allowable expenses, and gains (e.g. from crypto or property sales). HMRC calculates your tax, and you pay what’s owed by 31 January.

If your tax bill is over £1,000, you’ll usually need to make advance payments on account towards the following year, yet another important reason to plan ahead.

Cryptoassets: Don’t Ignore Them

Crypto is no longer a niche topic, it’s becoming common for freelancers, business owners, and young investors to hold digital assets like Bitcoin, or Ethereum. What many don’t realise is:

• Crypto is taxable — HMRC treats most crypto activity as a capital transaction, not income.

• You may need to declare even small trades — If you sell, swap, gift, or use crypto to buy goods/services, that could trigger a Capital Gains Tax (CGT) event.

• You get an annual CGT allowance (£3,000 for 2024/25) — but gains beyond that are taxable (at 10% or 20%, depending on your income).

Declaring crypto properly doesn’t just keep you compliant, beyond everything, it helps avoid issues down the line. HMRC claims it now receives data from exchanges directly and can issue penalties for undeclared gains.

Ways to Reduce Your Tax Bill (Legally)

Nobody wants to overpay tax, and the good news is, there are completely legal ways to reduce your liability:

• Use your allowances – such as the CGT allowance, personal allowance, and dividend allowance.

• Claim all allowable expenses – if you’re self-employed, this could include home office use, subscriptions, travel, and software.

• Offset crypto losses – if you’ve made a loss on some trades, you can offset them against future gains. But you must declare them to “lock in” the tax benefit.

• Consider ISA and pension planning – profits inside a stocks & shares ISA are tax-free, and pension contributions can extend your basic rate band. With crypto ETFs getting their spotlight as of late, it may be possible to gain exposure to cryptoassets via a traditional trading account.

• Married or in a civil partnership? – Consider transferring assets to a lower-earning spouse to use their allowances and reduce CGT exposure.

Don’t Leave It to the Last Minute

• Register by 5 October if this is your first return.

• File by 31 January to avoid fines — even if you owe nothing.

• Start keeping records now — receipts, invoices, crypto trades, bank statements, etc. The earlier you start, the less stressful it becomes. Of course, we are here to help, and our team of young, qualified professionals, love a bit of tech and crypto themselves so we'd be happy to advise and prepare calculations for you.