Project Overview
A UK FinTech startup wanted to build a cryptocurrency tax reporting platform for UK individual investors. UK H...
Technology Stack
Compliance & Standards
The Challenge
A UK FinTech startup wanted to build a cryptocurrency tax reporting platform for UK individual investors. UK HMRC taxation of cryptoassets (capital gains tax on disposal, income tax on mining/staking/airdrops), Section 104 pooling methodology for CGT calculation, integration with 40+ exchanges and blockchain networks, and UK GDPR for tax and financial personal data were the requirements. Budget: £85,000.
Our Approach
HMRC Cryptoasset Tax Rules
HMRC treats cryptoassets as capital assets for CGT.
Section 104 pool
- disposals are matched against a cost pool averaging all acquisitions of the same token type.
- Same-day rule: disposals matched against same-day acquisitions first. 30-day rule: disposals matched against acquisitions in the following 30 days (bed-and-breakfasting prevention).
- Platform implements all HMRC matching rules automatically — producing SA108 (Capital Gains Summary) compatible data.
Exchange API Integration
40+ exchange
APIs
Coinbase (REST API), Binance (REST + WebSocket), Kraken (REST), Gemini (REST), and major UK exchanges.
Blockchain direct
Ethereum (Etherscan API + direct RPC), Bitcoin (Blockstream API), and 12 additional chains.
Transaction classification
automated categorisation (buy, sell, swap, mining income, staking reward, airdrop, gas fee) using exchange API data + blockchain transaction analysis.
HMRC Self Assessment SA108 compatible output
each disposal with date, asset, quantity disposed, proceeds, cost, gain/loss.
Section 104 pool statement
- running pool balance per token type. 30-day rule matches: highlighted separately.
- PDF and spreadsheet output.
Missing cost basis flag
where acquisition data is unavailable (pre-platform history), platform flags for manual entry.
UK GDPR Tax Data Protection
Tax data is sensitive personal data — financial history, transaction amounts, and crypto holdings.
UK GDPR basis
contract performance (tax calculation service).
Data minimisation
only store transaction data needed for tax calculation.
Right to erasure
- HMRC recommends 22 years of tax record retention — platform explains this to users at erasure request.
- No third-party data sale: explicit prohibition in privacy policy and commercial terms.
The Results
Platform launched at 12 weeks, £78,000 — under budget.
Tax year calculations: 8,400 in first UK tax season.
HMRC Section 104 compliance: third-party tax accountant review of algorithm found zero calculation errors.
Exchange integrations: 42 exchanges live at launch.
User satisfaction: 4.5/5.
HMRC enquiries resolved: 3 users provided ClickMasters-generated reports during HMRC investigations — all accepted without challenge.
“HMRC accepted all three of our users' reports under enquiry — first time. The Section 104 pooling algorithm was independently reviewed by a Big 4 tax accountant and found error-free. In the crypto tax market, accuracy is everything." — CEO, UK Crypto Tax Platform (name withheld)”
Project Details
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