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Cashback is a common rewards system and is now offered by some crypto exchanges. Today we’re exploring the world of cryptocurrency cashback and outlining the tax implications.
So if you’re using a crypto cashback card from Crypto.com or Revolut? Here’s what you need to know about the tax treatment of those rewards.
What is crypto cashback?
Some crypto platforms reward you for using their debit cards. Spend £100 at a shop with a card that offers 5% back in Bitcoin, and you’ll receive £5 worth of BTC. It works just like traditional cashback, except the reward is in crypto.
Is crypto cashback taxable when you receive it?
Most likely not. HMRC don’t have specific guidance on crypto cashback, but their general cashback guidance says that sums received by ordinary retail customers as consideration for purchases shouldn’t be treated as taxable income.
Assuming this applies to crypto cashback (and it’s reasonable to assume it does), the tokens are likely treated as acquired for nil value, with no Income Tax at the time of receipt. Good news for cashback card users.
The exception: if you’re a ‘financial trader’ in crypto, or the cashback is received as part of another trade, the reward will be treated as taxable trading income.
What happens when you sell the cashback rewards?
This is where tax kicks in. When you sell, swap, spend, or gift the cashback reward, you’re making a disposal subject to CGT.
The most likely HMRC position (and the safest assumption) is that the acquisition cost is nil. So if you received £5 of Bitcoin as cashback and later sold it for £20, you’d pay CGT on the full £20.
There’s an argument that the cost basis could be the fair market value at the time of receipt, but this isn’t confirmed. This is the same grey area as non-taxable airdrops. We’d recommend using nil to be safe, or speaking to a tax professional if you want to explore the alternative.
Capital Gains Tax rates for crypto
*2024/25 is a split year: disposals before 30 October 2024 are taxed at 10%/20%; disposals on or after 30 October 2024 are taxed at 18%/24%.
CARF: your exchange is now reporting to HMRC
From January 2026, UK exchanges are required to report your transaction data directly to HMRC. Every trade, transfer, and deposit will be visible.
55–95% of UK crypto holders are estimated to be non-compliant. The window for easy voluntary disclosure is closing. Use Recap and speak to a Crunch accountant to get ahead.
FAQs
Is crypto cashback taxable when I receive it?
Most likely not, based on HMRC’s general cashback guidance. The tokens are likely acquired at nil value. Financial traders may be treated differently.
Do I pay tax when I sell crypto cashback rewards?
Yes. Selling cashback rewards is a disposal subject to CGT. The gain is calculated from the disposal proceeds minus the acquisition cost (likely nil).
The information provided in this article is for general informational purposes only and should not be construed as financial or tax advice. We recommend consulting with a qualified tax advisor or financial professional who can provide personalised advice tailored to your specific circumstances.
