/ Crypto / Tax implications of being paid a salary in crypto

Tax implications of being paid a salary in crypto

January, 2023

As increasing numbers of businesses are operating in the crypto space, more employees are being paid in crypto, and consequently we are often asked, how do I pay tax on my earnings?

Most employees in the UK are paid in fiat currency and will be subject to PAYE tax on their earnings when they are paid. This same PAYE rules also apply to any form of payment which is a Readily Convertible Asset (RCA) ie where there is a ready market for the asset that can convert it into cash (whether it is actually converted or not).

Most popular crypto assets would fall under this banner as it can be converted to cash relatively quickly. Consequently the employer would be responsible for calculating and deducting the necessary value of income tax and national insurance from any payment.

However some crypto assets may not be RCAs eg utility tokens that cannot be converted to cash. In those rare situations, although PAYE will not apply the individual will be required to declare the earnings on their self-assessment returns.

Don’t forget that in either case, if the crypto asset is sold, transferred or gifted there is also a capital gains event which may give rise to a gain or loss. Unfortunately if a loss occurs it can only be offset against capital gains in the usual manner and cannot be used to reduce the value of PAYE or income tax on the earnings.

Due to the overwhelming number of requests we are not accepting any more crypto enquiries at this time

PLEASE NOTE: OUR MINIMUM FEE FOR CRYPTO TAX SERVICES IS £1,000 + VAT

How we can help

We have an experienced team of crypto tax advisors familiar with the unique challenges relating to crypto trading and currency who can provide support with:

Calculating your taxable gains and losses
Your annual HMRC filing obligations
Undeclared crypto gains and disclosures
Tax planning to ensure that your cryptoassets are properly structured
Ensuring correct valuations are used for your cryptoasset disposals
Tax efficient structures for Non-UK domiciled individuals
HMRC tax disputes and investigations
Business start-ups in the cryptosphere

Need more advice from a Crypto specialist accountant?

We have a lot of information about the UK tax situation for Crypto and NFT on our website which you may want to read before getting in touch.

How we can help

We have an experienced team of crypto tax advisors familiar with the unique challenges relating to crypto trading and currency who can provide support with: