Accounting for cryptocurrency in the UK has become a board-level question even for companies that hold only modest treasury balances. There is no specific FRS 102 standard for crypto, so businesses apply the existing intangible asset, inventory or financial instrument rules — and HMRC’s tax treatment can diverge from the accounting answer. The accounting policy sits within your wider tax and VAT obligations, so it pays to get the classification right before year-end.
Accounting classification under FRS 102
The Financial Reporting Council confirmed that crypto generally does not meet the definition of cash, a financial asset or a non-financial financial instrument. The remaining options are:
| Holding | FRS 102 classification |
|---|---|
| Held as long-term treasury asset | Intangible asset (Section 18) |
| Held for sale in ordinary course | Inventory (Section 13) |
| Held by a broker-dealer | Inventory at fair value less costs to sell |
| Mining rewards (recognised as earned) | Revenue (Section 23), then intangible |
| Tokens received as payment | Revenue at fair value at receipt |
Most companies fall in the intangible asset bucket, which means cost less impairment and no gains until sale.
HMRC tax treatment
HMRC’s Cryptoassets Manual sets out the tax view, which is normally driven by the substance of the activity, not the accounting label.
| Activity | Typical UK tax treatment |
|---|---|
| Company holding tokens long-term | Intangible fixed assets / chargeable gain on disposal |
| Trading tokens speculatively | Trading profits (corporation tax) |
| Mining (small scale) | Miscellaneous income at fair value |
| Mining as a trade | Trading profits |
| Staking rewards | Miscellaneous income or trading |
| Customer payment in crypto | Revenue at GBP fair value, plus FX-equivalent gain/loss |
Indicators of trading include frequency, organisation, and commercial intent — the same “badges of trade” tests as any other asset. For the personal tax side, including how individual gains are computed and reported, see our dedicated UK cryptocurrency tax guide, which sits alongside the broader capital gains tax rules.
Practical bookkeeping points
- Record each acquisition with GBP cost at the date of purchase
- Maintain a wallet-by-wallet ledger with txid, blockchain and counterparty
- Re-test for impairment at each balance sheet date
- Disclose the accounting policy explicitly in the notes
- Report disposals as either chargeable gains or trading income
- Set up a clear chart-of-accounts code, e.g. “Intangible asset – cryptocurrency”
- Run a year-end review against your year-end checklist
Disclosures and audit
Listed companies and larger SMEs holding material crypto must disclose the carrying amount, valuation methodology, security/custody arrangements, and any material impairments. The audit risk areas are existence (custody and private keys) and valuation at year-end.
Final thoughts
Crypto is no longer fringe in UK SME finance — make sure the accounting policy survives a year-end audit. Pair this with our FRS 102 for UK SMEs article and the corporation tax CT600 filing guide, and understand how disposals feed into the wider corporation tax position. The bank reconciliation explainer and the FRC Staff Education Note on cryptoassets are useful starting points. See pricing for bookkeeping and foreign-currency invoicing at daily ECB rates.