Income Tax

Income Tax is charged on income from all sources, including employment, self-employment, pensions, savings, and investments. For 2023/24, the rates are:

Income Tax Rates 2023/24

Band	Taxable Income	Tax Rate
Personal Allowance	Up to £12,570	0%
Basic rate	£12,571 to £50,270	20%
Higher rate	£50,271 to £125,140	40%
Additional rate	Over £125,140	45%

Income Tax and Cryptocurrency

Certain crypto activities are treated as income and subject to Income Tax:

• Mining rewards: Treated as miscellaneous income
• Staking rewards: Taxed as savings income
• Airdrops: Generally treated as income
• Forking: May be treated as income if received without cost

Trading Cryptocurrency

If you trade crypto as a business, profits are subject to Income Tax (and possibly National Insurance) rather than Capital Gains Tax. Signs of trading include:

• Frequent buying and selling
• Using leverage or derivatives
• Dedicated workspace or software
• Significant time spent on trading

Self Assessment

If your crypto income exceeds certain thresholds, you must complete a Self Assessment tax return. The main thresholds are:

• £1,000+ in savings income
• £2,500+ in self-employment income
• Any amount of trading income

Paying Income Tax

Income Tax is usually collected through:

• PAYE for employed income
• Self Assessment payments on account
• Final balancing payment

Tax Reliefs and Allowances

Various reliefs are available to reduce your Income Tax bill:

• Personal Allowance
• Marriage Allowance
• Pension contributions
• Charitable donations

For more information about Income Tax, visit the official HMRC website.