How to choose a crypto tax accountant in the UK

Why does crypto tax need a particular kind of accountant?

Crypto records do not look like ordinary bank statements. A single year can include hundreds of trades across several exchanges, wallets and blockchains. Each swap, sale or spend can be a separate event for tax purposes.

HMRC treats most crypto disposals as taxable events. Its Cryptoassets Manual explains how it views exchange tokens, staking, airdrops and DeFi. The rules are detailed, and how they apply depends on the facts of each case.

An accountant without crypto experience may struggle to match transfers between wallets, or may count a transfer as a sale. That can overstate or understate what you owe. A specialist knows where these errors usually hide.

Is the accountant a member of a professional body?

In the UK, almost anyone can call themselves an accountant or a crypto tax adviser. Check professional body membership first. Members follow a code of ethics and must keep their knowledge current.

Common bodies include ACCA, ICAEW, ICAS and AAT, and each offers a way to check membership. ACCA runs a public directory of member firms.

Members are supervised for anti-money laundering purposes. A proper firm will ask for identity documents and may ask where your crypto came from. Expect this, especially with larger holdings.

Can they work with your exchange and wallet data?

Your accountant should be comfortable with exchange exports, wallet addresses and blockchain explorers. They should ask for every exchange and wallet you have used, including ones you have since closed.

HMRC guidance on selling cryptoassets says you must keep your own records of each transaction. It also says exchange reports are not tax calculations and do not track your pooled costs. A good accountant will check those reports rather than rely on them.

• Exports from every centralised exchange you have used.
• Public wallet addresses for self-custody and hardware wallets.
• Records of transfers between your own wallets.
• Bank statements showing money in and out of exchanges.
• Any gaps where an exchange has closed or records are missing.

Do they understand DeFi, staking and other crypto income?

Trading is only part of the picture. Staking rewards, lending, liquidity pools, airdrops and mining can each be treated differently. Some may be income, some may be gains, and some may be both.

Ask the accountant to explain, in plain terms, how they would approach the activity you actually do. You are not asking for a final tax answer in a first call. You are checking whether they recognise the activity and know where to look.

Be wary of anyone who gives a confident answer on DeFi without asking questions first. The treatment of many DeFi arrangements depends on the terms of each protocol. AFE reviews those facts before forming a view.

Which crypto tax software do they use?

Most crypto accountants use specialist software to import transactions and work out gains. The software is a tool, not an answer. Someone still needs to review the output and correct mismatched transfers.

Ask which tools the accountant supports and whether you need your own subscription. Ask who checks the reconciliation before figures go on your tax return.

Can they help with earlier years you have not reported?

Many people only learn about crypto tax after several years of trading. HMRC offers a route to tell it about unpaid tax on cryptoassets. That route covers working out what you owe, plus any interest and penalties.

Ask whether the accountant has prepared disclosures like this before. Ask how they rebuild records when an exchange has closed. A careful, complete disclosure is usually better than a rushed one.

How HMRC treats an earlier year depends on the facts, including why it went unreported. Time limits apply to how far back HMRC can look [VERIFY WITH HMRC / ADAM]. AFE reviews your history before advising on the next step.

How are fees agreed, and who will you speak to?

Crypto work can range from a handful of trades to many thousands. Ask how the fee is worked out and what happens if more wallets appear later. The fee and its scope should be written into an engagement letter.

Ask who will prepare your figures and who will answer your questions. A firm that sells through a senior name and then hands the work on is worth questioning. Ask how quickly they reply, too.

What should you ask in a first conversation?

Use the checklist below with any firm. The right-hand column shows how AFE answers each point today, including details still being confirmed.

What does AFE Accountants offer crypto clients?

AFE Accountants Limited is registered in England and Wales and was incorporated in 2014. It is an ACCA member firm, and Adam Feyzi FCCA leads the crypto work personally.

For individuals, AFE offers crypto tax reporting, covering gains, crypto income and earlier years. For companies that hold or are paid in crypto, it offers blockchain and Web3 business accounting.

You can read more on the crypto and blockchain page or in the plain guide to how HMRC treats cryptoassets. The first consultation is free, and you can book it here.