If you're living in the UK and interested in entering the world of cryptocurrencies, you're in the right place. This guide provides a clear overview of how to buy Bitcoin and other digital assets using British pounds, the legal landscape, tax obligations, and recommended platforms. Let's get started.
Top Cryptocurrency Exchanges in the UK
To buy Bitcoin in the UK, you need an account with a cryptocurrency exchange, broker, or a dedicated crypto app. The following platforms are well-regarded options that allow you to purchase cryptocurrencies using GBP:
- OKX: A major global exchange known for its high trading volume and robust security features.
- Kraken: A widely trusted and regulated platform popular among experienced traders.
- Wirex: A user-friendly app that also offers a crypto payment card.
These platforms support convenient purchases with a bank card. The process is generally similar across providers, but we'll use OKX as a primary example for instructional purposes.
Step-by-Step Guide to Buying Bitcoin in the UK
Purchasing Bitcoin in the UK is a straightforward process. Just follow these steps:
Step 1: Go to the OKX website, create an account, and complete the identity verification process (KYC).
Step 2: From the top menu, select the "Buy Crypto" option. Choose GBP as your fiat currency and Bitcoin (or another cryptocurrency) as the asset you wish to purchase. Click the BUY button.
Step 3: Select your payment method, such as a bank card. Enter your card details and complete the payment. Once the transaction is confirmed, the purchased cryptocurrency will appear in your OKX wallet.
That's it! You have now successfully acquired Bitcoin. For a wider selection of assets and trading tools, you can 👉 explore this advanced platform.
Are Cryptocurrencies Legal in the UK?
Yes, cryptocurrencies are legal in the United Kingdom. However, they are subject to regulations and oversight. The UK government and its financial regulatory body, the Financial Conduct Authority (FCA), monitor the crypto market to balance financial innovation with consumer protection and systemic stability.
In January 2021, the FCA banned the sale of cryptocurrency derivatives and exchange-traded notes (ETNs) to retail consumers due to concerns about the potential for significant losses. This ban does not apply to the direct buying, selling, or holding of cryptocurrencies like Bitcoin and Ethereum. Therefore, you can legally own and trade crypto assets in the UK.
It's also worth noting that the UK government has been researching the potential development of a central bank digital currency (CBDC), sometimes referred to as 'Britcoin'.
Crypto Tax Rules in the UK
HM Revenue and Customs (HMRC), the UK's tax authority, does not classify cryptocurrencies as traditional currency but as taxable assets.
If you hold cryptocurrencies as a personal investment and make a profit when you sell them, you may be liable for Capital Gains Tax (CGT). For the tax year up to 2026, you have an annual tax-free allowance of £12,570. Only profits exceeding this threshold are taxable. The CGT rates are 10% for basic-rate taxpayers and 20% for higher-rate taxpayers.
In other circumstances, such as receiving crypto as payment from an employer, mining cryptocurrencies, or trading to a degree that HMRC considers a business activity, you may be liable to pay Income Tax and National Insurance contributions.
Individuals involved in crypto investing or trading must register for Self Assessment with HMRC and file a tax return to declare their income and gains. Keeping precise records of all transactions, including dates, amounts, and values in GBP, is essential for accurate tax calculation and payment. The deadline for filing your return and paying any tax owed is January 31st each year.
Summary
Cryptocurrencies are legal in the United Kingdom. You can legally buy, sell, hold, and trade them on various exchanges. Numerous reputable platforms facilitate the purchase of Bitcoin and other digital assets using British pounds. Living abroad does not prevent you from starting your cryptocurrency journey.
Frequently Asked Questions
How can I buy Bitcoin in the UK?
You can easily buy Bitcoin through a registered cryptocurrency exchange like OKX or Kraken, or via a dedicated crypto app. These platforms allow you to purchase crypto using GBP via bank transfer or card payment.
Is it possible to buy Bitcoin with GBP?
Yes, many major exchanges operating in the UK allow you to buy Bitcoin directly with British pounds using a debit or credit card.
Are cryptocurrencies legal in the UK?
Yes, cryptocurrencies, including Bitcoin, are legal in the UK. The government regulates crypto businesses, such as exchanges, under anti-money laundering (AML) and counter-terrorist financing (CTF) regulations.
Do I have to pay taxes on crypto profits in the UK?
Yes, profits from selling cryptocurrencies are subject to Capital Gains Tax if they exceed your annual tax-free allowance. Income from activities like mining or receiving crypto as payment may be subject to Income Tax.
Can I pay my taxes with Bitcoin in the UK?
No, HM Revenue and Customs (HMRC) does not currently accept payments in Bitcoin or any other cryptocurrencies. Taxes must be paid in British pounds.
Is Bitcoin considered legal tender in the UK?
No, Bitcoin and other cryptocurrencies are not considered official legal tender in the UK. They are, however, recognized as a legitimate form of exchange or property.
What is the cryptocurrency tax rate in the UK?
The Capital Gains Tax rate on crypto profits depends on your income tax band. It is 10% for basic-rate taxpayers and 20% for higher-rate taxpayers.