VAT and crypto in the UK: selling for crypto, exchanging it, mining and NFTs

Most of what’s written about crypto tax in the UK is about Capital Gains Tax and Income Tax. But businesses that deal with crypto also meet VAT: when they sell for crypto, run an exchange service, mine, or sell NFTs. HMRC sets out its approach in its internal manuals and in guidelines it updated on 21 October 2026.

This guide summarises what HMRC says. For tax on individuals, see UK crypto tax.

The starting point: no special VAT rules

HMRC’s Guidelines for Compliance GfC21, updated on 21 October 2026, are aimed at UK and overseas businesses involved in cryptoasset transactions where UK VAT may apply. Their core message is simple: there are no separate VAT rules for cryptoassets. VAT still depends on what you supply and how it is used, not on how a token is described.

The guidelines describe cryptoassets as a digital representation of value created, stored and transferred using public computer networks. Some tokens represent ownership of something, or a right to goods or services, which HMRC calls the underlying asset or supply.

Selling goods or services for crypto

If your business accepts crypto as payment, HMRC’s manuals say:

• No VAT is due on the token itself when exchange tokens are given in exchange for goods and services.
• VAT is due in the normal way on the goods or services you sell.
• The value for VAT is the pound sterling value of the tokens at the point the transaction takes place.

So a shop that takes £120 worth of bitcoin for goods on which VAT is due accounts for VAT exactly as if it had been paid £120 in pounds. What changes is the record-keeping: you need to note the sterling value of the crypto when you received it, and where the rate came from.

Exchanging crypto: exempt

HMRC’s VAT Finance Manual explains that in 2014 it decided that the financial services supplied by bitcoin exchanges, exchanging bitcoin for legal tender and vice versa, are exempt from VAT. It also refers to the Court of Justice of the EU’s ruling in David Hedqvist (C-264/14), which held that exchanging traditional currencies for non-legal-tender such as bitcoin, and the other way round, are financial transactions covered by the exemption in the VAT Directive.

HMRC’s cryptoassets manual follows the same line:

• services needed to exchange tokens for legal tender, or for other exchange tokens, and vice versa, are exempt;
• charges made over and above the value of the tokens for arranging transactions can also be exempt, if they meet the conditions in HMRC’s VAT Finance Manual (VATFIN7200).

GOV.UK defines taxable turnover as everything you sell that isn’t VAT exempt or out of scope, so exempt exchange services don’t count towards the registration threshold.

Mining: outside the scope of VAT

HMRC says exchange tokens received by miners for their mining activities are generally outside the scope of VAT. Its reasoning: mining doesn’t amount to an economic activity for VAT purposes, because there’s an insufficient link between any service provided and the reward, and there’s no customer for the mining service.

HMRC’s VAT Finance Manual adds that charges by miners for specific transactions, such as fees for verifying a particular transaction, can be exempt. The distinction matters: block rewards are outside VAT altogether, while some specific transaction fees may be exempt supplies.

For the Income Tax side of mining, see UK crypto tax.

NFTs and other tokens

HMRC’s guidelines describe a non-fungible token (NFT) as a unique digital certificate that represents ownership of an asset, and say its VAT treatment depends on the asset it represents:

• an NFT representing digital art will usually get the same VAT treatment as digital art;
• an NFT representing a physical item, such as a car, will usually get the same treatment as that item.

The guidelines then go through the questions a seller has to answer: whether the supply is a digital service, whether the customer is a business or a consumer, and where the customer is located. Those answers decide whether UK VAT applies, or the VAT of another country. See what are NFTs?

Know your customer, for VAT

A blockchain transaction records wallet addresses and amounts, but not who the buyer is or where they live. HMRC’s guidelines say you must collect and keep enough information to work out the right VAT treatment, even when the customer’s details aren’t on the blockchain. In particular, you need to know:

• who your customer is;
• where they’re established;
• whether they’re a business or an individual.

HMRC warns that if you don’t collect enough customer information, you may under-declare VAT, which can lead to compliance checks, adjustments, interest and penalties. Its worked example is an artist selling NFTs for ether who changes her website so that customers create an account and give evidence of their location before buying.

Platforms and marketplaces

GfC21 also covers digital platforms and marketplaces where other people sell cryptoassets. HMRC says that in some circumstances the platform operator may be responsible for accounting for VAT on those sales, rather than the seller. If you sell through a platform, check the position with it.

When to register

The usual registration rules apply. GOV.UK says you must register if your taxable turnover for the last 12 months goes over £90,000, or you expect it to go over £90,000 in the next 30 days. Taxable turnover leaves out sales that are VAT exempt or out of scope, so exempt exchange services and mining rewards don’t count towards it.

For individuals

If you’re an individual buying, selling or holding crypto as an investment, VAT isn’t usually something you deal with. Your questions are about Capital Gains Tax and, for some receipts, Income Tax. See UK crypto tax and how to report crypto on a Self Assessment return.