Accepting Crypto Payments: What SMEs in Salford Must Know About Tax and Accounting

As cryptocurrency adoption grows across the UK, smaller and medium-sized enterprises (SMEs) in Swinton and Salford are exploring the benefits of accepting crypto payments. While this innovation can improve customer experience and enhance flexibility, it also brings unique tax and accounting responsibilities. At Co-gency Chartered Accountants, we help businesses stay compliant with HMRC rules, record crypto transactions accurately, and manage tax efficiently.

HMRC does not consider cryptocurrency as money or currency. Instead, cryptoassets are treated as property. If your business accepts crypto as payment for goods or services, this income must be recorded at its fair market value in GBP on the transaction date. It must also be included in your accounts for Income Tax or Corporation Tax purposes.

If you later sell or exchange the cryptoasset, you may trigger Capital Gains Tax (CGT) on any increase in value. More information is available in the HMRC Cryptoassets Manual.

HMRC expects businesses to maintain comprehensive records of each crypto transaction, including:

• Date of transaction
• Type and amount of cryptoasset
• GBP value at time of transaction
• Transaction fees or costs

Good record-keeping is vital for calculating accurate tax liabilities and staying compliant with evolving rules. HMRC’s record-keeping expectations are outlined here.

Income Tax / Corporation Tax
Crypto received as payment is treated as trading income and taxed accordingly. Businesses must convert the crypto value to GBP on the transaction date and report this on their annual return.

Capital Gains Tax
If you dispose of cryptoassets—by selling or exchanging them—you must calculate any capital gain or loss and report it in your tax return. This applies even if the crypto was initially received as payment.

Cryptocurrencies themselves are generally exempt from VAT. However, the underlying goods or services you supply in exchange for crypto are still subject to VAT in GBP. Businesses should account for VAT as if the payment had been made in cash, using the GBP equivalent at the time of the transaction.

Crypto-related income and disposals must be reported in annual filings:

• Self Assessment for individuals
• Company Tax Returns for businesses

In some cases, taxpayers may also need to make a voluntary disclosure using HMRC’s Cryptoasset Disclosure Form.

From 1 January 2026, cryptoasset service providers operating in the UK will be required to comply with the OECD’s Crypto-Asset Reporting Framework (CARF). This includes collecting and sharing client transaction data with HMRC to improve transparency.

You can find more information in the government’s statement on crypto reporting and CARF.

• Accurate Valuation: Use consistent, reputable sources for crypto exchange rates when recording GBP values.
• Consistent Tracking: Log every transaction, whether you sell, swap, stake, or gift crypto.
• Separate Trading vs Holding: HMRC distinguishes between capital gains and trading income. Most businesses fall under capital gains rules, unless crypto trading is a core activity.

At Co-gency Chartered Accountants, we help local businesses in Swinton and Salford:

• Record and value crypto transactions in line with HMRC expectations
• Calculate and report income and gains from crypto accurately
• Ensure compliance with VAT, CGT, and income tax rules
• Prepare your business for upcoming CARF requirements
• Integrate crypto accounting into your broader digital systems

HMRC is actively encouraging crypto users to come forward, and tax compliance for digital assets is under growing scrutiny. For example, more than 8,000 letters were issued to crypto investors in 2023 reminding them to declare unpaid taxes.

Working with a qualified chartered accountant is the best way to avoid errors, penalties, and missed opportunities for tax efficiency.

Whether you are already accepting crypto payments or considering it as part of your future strategy, our team is here to support your business.

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