By Bivu Das, Kraken U.K. General Manager
“Tax complexity itself is a kind of tax.” This famous quote from U.S. Senator Max Baucus resonates regardless of your country of residence. In the emerging crypto ecosystem, there are additional complications given the lack of clear and consistent jurisdictional tax guidelines and the importance of accurately tracking crypto prices across multiple wallets and exchanges.
In the U.K., the crypto tax reporting requirements from His Majesty’s Revenue and Customs (HMRC) are relatively clear, and the Government recently laid new legislation to further codify the reporting responsibilities of individuals and exchanges regarding their crypto positions. However, there continues to be a lack of mainstream understanding around the tax implications of investing and transacting in crypto. According to a 2022 HMRC report, 59% of U.K. crypto owners knew little or nothing about capital gains taxation, yet 68% were likely to acquire more crypto in the future.
This disparity demonstrates a friction that could ultimately hinder participation in this transformational technology. For this reason, we continue to work to break down barriers that prevent people from engaging with the crypto ecosystem.
To support our clients on their journey to effectively manage their crypto portfolios, we have partnered with Koinly, a leading crypto tracking and tax reporting solution. Koinly can help our clients simply and accurately manage and report their crypto transactions in line with the latest HMRC guidance. Starting today, Koinly will provide discounted access to its crypto tax software for all U.K. Kraken clients who sign up to their service.
Until 31 January 2025, U.K.-based Kraken clients can receive a 50% discount code off their first HMRC tax report. Discount codes, which are being emailed to U.K. Kraken clients during November and December, can be applied by new Koinly customers at their checkout page. Kraken clients can also connect their Kraken accounts to Koinly using an API, or by uploading a .CSV file, to proactively manage their tax situation while trading.
Adam Saville-Brown, General Manager at Koinly, said “Reporting crypto to HMRC doesn’t need to be complicated, but it often feels that way for many investors. As regulatory frameworks evolve, particularly with the reduction of the capital gains tax free allowance, more investors than ever will need to accurately report their crypto holdings.”
“Our partnership with a platform as established as Kraken U.K. not only simplifies the tax reporting process but also underscores the importance of accessible, compliant financial management within the crypto ecosystem. As crypto continues to grow, providing tools that empower investors to transact confidently while staying compliant with HMRC will be vital for the long-term health and mainstream adoption of the industry.”
Over the coming months we will be exploring additional ways to bolster our educational offering as we empower our clients to better navigate the crypto and DeFi ecosystems. The deadline to submit an online self assessment tax return is midnight, 31 January 2025.
Payward Ltd (trading as Kraken) is registered as a cryptoasset firm with the Financial Conduct Authority (FRN: 928768) registered office at 6th Floor, One London Wall, London, United Kingdom, EC2Y 5EB. Cryptoasset services offered by Payward Ltd are unregulated and not covered by the Financial Services Compensation Scheme as well as the FCA’s consumer protection regulations. Note the value of cryptoassets can go down as well as up, gains may be subject to Capital Gains Tax and there may be extra charges when paying via credit card from your provider.
These materials are for general information purposes only and are not investment advice or a recommendation or solicitation to buy, sell, stake, or hold any cryptoasset or to engage in any specific trading strategy. Kraken makes no representation or warranty of any kind, express or implied, as to the accuracy, completeness, timeliness, suitability or validity of any such information and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. Kraken does not and will not work to increase or decrease the price of any particular cryptoasset it makes available. Some crypto products and markets are regulated and others are unregulated; regardless, Kraken may or may not be required to be registered or otherwise authorised to provide specific products and services in each market, and you may not be protected by government compensation and/or regulatory protection schemes. The unpredictable nature of the crypto-asset markets can lead to loss of funds. Tax may be payable on any return and/or on any increase in the value of your cryptoassets and you should seek independent advice on your taxation position. Geographic restrictions may apply. See Legal Disclosures for each jurisdiction here.
The views and opinions expressed in this article are those of the author and do not necessarily represent the views or opinions of Kraken or its management.
