Crypto Staking Rewards vs Mining Income Tax: 2026/27 Comparison
HMRC generally taxes both cryptoasset staking rewards and mining rewards as income when they are received, based on their sterling value at that time, and then applies Capital Gains Tax when the tokens are later sold or exchanged. Whether either activity is treated as a hobby or a trade changes exactly how the income is taxed and what National Insurance, if any, applies. This guide compares the two for 2026/27.
Key facts for 2026/27
- HMRC's published cryptoassets manual treats most staking rewards as miscellaneous income (or trading income, if run with sufficient frequency, organisation and commerciality to amount to a trade) at the sterling value of the tokens when the taxpayer gains control of them.
- Mining rewards are treated similarly: an occasional or hobby-level miner is generally taxed on the sterling value of mined tokens as miscellaneous income at receipt, while a more organised, business-like mining operation may instead be taxed as trading income.
- Once tokens received from staking or mining have been taxed as income, their sterling value at receipt becomes the acquisition cost for Capital Gains Tax purposes — any further gain (or loss) when the tokens are later sold, swapped or spent is calculated against that cost basis.
- The Capital Gains Tax Annual Exempt Amount for 2026/27 is £3,000, and gains above this are taxed at 18% for basic-rate taxpayers and 24% for higher and additional-rate taxpayers on the disposal of cryptoassets (treated as "other assets" for CGT purposes).
- If either activity is judged by HMRC to amount to a trade, Class 4 National Insurance may also apply on the trading profit, at 6% between the Lower Profits Limit of £12,570 and the Upper Profits Limit of £50,270, and 2% above that, alongside standard Income Tax at 20%/40%/45%.
Side-by-side comparison
| Feature | Staking Rewards | Mining Rewards |
|---|---|---|
| Tax on receipt (typical case) | Miscellaneous income at sterling value when control is gained | Miscellaneous income at sterling value when tokens are received |
| Tax on receipt (organised/business-like activity) | May instead be taxed as trading income plus Class 4 NI if run as a business | May instead be taxed as trading income plus Class 4 NI if run as a business |
| Cost basis for later CGT | Sterling value at receipt, once taxed as income | Sterling value at receipt, once taxed as income |
| CGT on eventual disposal | 18%/24% on gains above the £3,000 Annual Exempt Amount for 2026/27 | 18%/24% on gains above the £3,000 Annual Exempt Amount for 2026/27 |
| Key factor determining hobby vs trade | Frequency, organisation, and degree of activity involved in the staking operation | Frequency, organisation, scale of hardware/electricity use, and commerciality of the mining operation |
| Electricity/hardware cost treatment | Not usually a factor for pure staking (no significant equipment involved) | A key cost if treated as a trade — allowable business expense against trading profit |
| Record-keeping burden | Track sterling value and date of every reward received | Track sterling value and date of every reward received, plus equipment/electricity costs if trading |
How HMRC taxes cryptoasset staking rewards
Staking involves locking up cryptoassets to support a blockchain network's operation (for proof-of-stake networks), in return for periodic reward tokens. HMRC's guidance treats most staking rewards received by an individual as miscellaneous income, taxable at the sterling value of the tokens at the point the taxpayer gains control of them, added to their other income for the tax year and taxed at their marginal Income Tax rate.
If staking activity is carried out with sufficient frequency, organisation, risk and commercial intent to amount to a trade — for example, running dedicated infrastructure as a validator on a commercial scale — HMRC may instead treat the rewards as trading income, which brings Class 4 National Insurance into the calculation alongside Income Tax, but also allows genuine business expenses relating to the activity to be deducted from taxable profit.
Whichever basis applies, once the reward tokens have been taxed as income, their sterling value at that point becomes their acquisition cost for Capital Gains Tax purposes when they are later sold, swapped for another cryptoasset, or spent.
How HMRC taxes cryptoasset mining rewards
Mining involves using computing power to validate transactions and secure a blockchain (typically proof-of-work networks), in return for newly created tokens and/or transaction fees. HMRC's approach mirrors staking in principle: an individual mining occasionally, without significant organisation or a commercial degree of activity, is generally taxed on the sterling value of mined tokens as miscellaneous income at the point of receipt.
Where mining is carried out on a larger, more organised and commercial scale — significant hardware investment, dedicated premises, ongoing management of the operation — HMRC may treat it as a trade, meaning the mined tokens' value is taxed as trading income, Class 4 National Insurance may apply, and genuine costs such as electricity and equipment depreciation can be deducted as allowable business expenses against the trading profit.
As with staking, the sterling value of mined tokens at the point they are taxed as income becomes the acquisition cost for any later Capital Gains Tax calculation when those specific tokens are eventually disposed of.
The shared CGT layer and record-keeping both activities require
Both staking and mining rewards go through the same two-stage tax treatment: an Income Tax (or trading income) charge at the point of receipt, followed by a potential Capital Gains Tax charge when the tokens are later disposed of, calculated on any increase in value between receipt and disposal. Both activities are also subject to the same 2026/27 Capital Gains Tax Annual Exempt Amount of £3,000 and the same 18%/24% rates on gains above that amount.
Because reward tokens can be received frequently — sometimes daily or even more often, for active stakers and miners — keeping accurate, contemporaneous records of the sterling value and date of every individual reward is essential for both activities, both to support the initial income tax calculation and to establish an accurate cost basis for every later disposal.
Whether staking or mining activity crosses the line from a hobby into a trade is a question of fact based on HMRC's established "badges of trade" tests — frequency, organisation, commerciality, and the degree of risk and effort involved — rather than a simple monetary threshold, so anyone running either activity at meaningful scale should get specific advice on how their own activity is likely to be classified.
Verdict
Both staking rewards and mining income follow the same fundamental two-stage HMRC approach: an Income Tax (or trading income) charge at the point tokens are received, based on their sterling value, followed by a potential Capital Gains Tax charge when those specific tokens are later disposed of.
The key practical difference for most individuals is that mining more often involves meaningful equipment and electricity costs, which only become deductible if the activity is classified as a trade — a classification decided by the scale, frequency and organisation of the activity rather than a fixed threshold.
Whichever activity you carry out, accurate, contemporaneous records of the sterling value and date of every reward received are essential, both to get the initial income calculation right and to establish an accurate cost basis for Capital Gains Tax when the tokens are eventually sold, swapped, or spent.