For individuals whose crypto records are incomplete, inconsistent or not yet ready for tax reporting.
A crypto record review may be needed where there are missing wallets or exchanges, negative balances, unexplained disposals, incorrect transaction labels, incomplete imports, unmatched transfers or other issues that prevent a supportable tax position from being prepared.
Crypto tax software can be helpful, but simply importing data into software is not enough. The records still need to be tested, checked and reviewed to see whether the output makes sense.
Why a Crypto Record Review May Be Needed
Crypto records can become difficult to rely on when activity is spread across exchanges, wallets, DeFi platforms, NFT platforms or older accounts.
The issue is often not one single missing file. It may be several smaller problems that affect the overall position.
For example, the records may include:
- missing wallets or exchanges
- incomplete transaction history
- unmatched transfers
- negative balances
- incorrect transaction labels
- duplicated entries
- missing acquisition costs
- income treated as a transfer
- transfers treated as disposals
- DeFi or staking activity that has not been classified properly
These issues can affect gains, losses, income and balances. If they are not reviewed, the figures may look complete while the position underneath remains unreliable.
Why Software Reports Need Checking
Crypto tax software depends on the information entered into it.
If all wallets, exchanges and platforms have been included, the software can help organise the data and produce useful reports. However, if information is missing or incorrectly classified, the software may still produce figures that look tidy but do not reflect the full position.
That is why a crypto record review looks beyond the headline report.
The review may consider whether the balances appear reasonable, whether transfers have matched correctly, whether transaction labels make sense and whether obvious gaps can be identified from the information available.
The aim is not to assume the software is wrong. The aim is to check whether the software output is reliable enough to support tax reporting.
What This Work May Include
This work may include:
- review of transaction data available for the agreed period
- review of exchanges, wallets, platforms or software reports within the agreed scope
- identification of apparent missing wallets, exchanges, transfers, balances or data sources
- identification of apparent incomplete imports, missing tags, duplicate entries or classification issues
- identification of apparent issues involving staking, airdrops, liquidity provision, NFTs, DeFi or other cryptoasset activity where visible from the available records
- review of whether balances and transaction flows appear consistent with the data provided
- a written summary of findings and recommended next steps
The aim is to identify what appears to be wrong, what may need to be corrected and whether the records can support tax reporting.
What Reconciliation Means in Practice
Reconciliation does not mean forcing the software to produce a number.
It means reviewing the available records to understand whether the data is complete, consistent and capable of supporting the tax position.
That may involve checking whether assets have moved between accounts, whether opening and closing balances make sense, whether known wallets and exchanges have been included, and whether transaction labels reflect what actually happened.
In some cases, the review may show that the records can be corrected and used. In other cases, it may show that more information is needed before the tax position can be prepared properly.
Working With Your Existing Accountant or Tax Adviser
You may already have an accountant or tax adviser who deals with your wider tax affairs.
In some cases, the issue is not that you want to change adviser. It is that your existing adviser may not have the specialist cryptoasset knowledge, software experience or practical confidence needed to review the crypto records properly.
Sat Tax may be able to assist with the crypto record review and reconciliation work while you keep your existing accountant or tax adviser.
In that situation, the scope will need to be agreed clearly. Sat Tax can review the cryptoasset records, identify issues, provide a summary of findings and, where agreed, support the preparation of crypto tax figures. Your existing adviser may then continue to deal with the wider tax return or other tax matters.
This type of work is only undertaken where the responsibilities are clear and the scope has been agreed in writing.
Correction Work
Correction work is not automatically included unless separately agreed.
In some cases, you may be able to correct the records yourself using the findings from the review. In other cases, you may ask Sat Tax to assist with corrections, subject to written agreement on the revised scope and fee basis.
No additional work will be carried out unless it has first been discussed and agreed in writing.
Limits of a Crypto Record Review
A crypto record review or reconciliation does not guarantee that every issue will be found or that the data is completely accurate.
Cryptoasset records can be complex, especially where older transactions, missing exports, unsupported platforms or DeFi activity are involved. The review is based on the records made available and the scope agreed in writing.
You remain responsible for reviewing the final data and confirming that it is complete and accurate to the best of your knowledge before it is relied upon for tax reporting.
When Tax Reporting Can Continue
Tax reporting can usually continue once the records are good enough to support the figures being reported.
If the records remain incomplete, inconsistent or unsupported, it may not be appropriate to prepare a tax return, disclosure or other HMRC submission until the position has been improved.
This protects the quality of the work and helps avoid carrying weak data into a submitted tax position.
Getting Started
The first step is to complete the enquiry process so the condition of your records, the tax years involved and the likely work required can be reviewed.
If Sat Tax can assist, the scope of work and fee basis will be confirmed in writing before work begins.
You can also read more about the information usually needed on the Crypto Tax Records page, or review the How It Works page to understand the full process.
