​HMRC has published new guidance on the VAT treatment of cryptoassets, including non-fungible tokens (NFTs), providing welcome clarity for businesses operating in this fast-moving area. Businesses that create, sell, or facilitate NFT transactions should now review how they determine VAT liability, identify customers, and meet their registration obligations.

Published on 15 October 2026, HMRC's new Guidelines for Compliance - GfC21: Help with VAT treatment of cryptoassets, covers issues including VAT registration, place of supply, customer information and the responsibilities of digital platforms and marketplaces.

For businesses involved with NFTs and other cryptoassets, the guidance is worth careful consideration.

Why was the VAT position for NFTs unclear?

Until now, HMRC had provided very limited guidance on the VAT treatment of NFTs.

HMRC's existing cryptoasset guidance focused largely on exchange tokens such as Bitcoin. In October 2024, HMRC confirmed that it did not have specific guidance dealing with NFTs, directing taxpayers towards its existing guidance on cryptoassets and digital services.

Businesses therefore had to apply general VAT principles, with advisers taking different views on the correct treatment.

One approach treated an NFT as a supply of services. If it was supplied electronically with little or no human intervention, it could potentially qualify as an electronically supplied service (ESS).

Another approach considered what the NFT represented, including the underlying asset or the rights acquired by the customer.

This distinction can have significant consequences for VAT liability, place of supply and compliance obligations.

What does HMRC now say about NFTs?

HMRC's new guidance provides a much clearer framework. Its starting point is there aren’t separate VAT rules for cryptoassets. The VAT treatment depends on what is actually supplied and how it’s used.

For NFTs, the VAT treatment will depend on the asset represented by the NFT.

For example:

• An NFT representing digital art will generally follow the VAT treatment of digital art; and
• An NFT representing a physical asset, such as a car, will generally follow the VAT treatment of that asset.

This means there is no single VAT treatment for every NFT. Businesses need to consider what each NFT represents and what the customer receives.

HMRC’s examples also indicate that an NFT representing digital artwork may be an electronically supplied service. If so, the place of supply rules for digital services may apply.

What does this mean for your business?

The consequences can be significant, particularly for businesses selling NFTs internationally.

Where digital services are supplied to consumers, the place of supply will generally depend on where the customer belongs. Businesses therefore need to establish whether their customers are businesses or consumers and where those customers are located.

HMRC specifically highlights the importance of obtaining and retaining sufficient customer information. A blockchain wallet address will not necessarily provide the information needed to determine the correct VAT treatment.

Businesses operating NFT platforms and marketplaces should also review their position. Depending on how a platform operates, it may itself be responsible for accounting for VAT on supplies made by third parties.

What should you do now?

If your business creates, sells, or facilitates transactions involving NFTs or other cryptoassets, now is a good time to review your VAT position.

In particular, businesses should consider:

• What is actually being supplied and what rights the customer receives;
• Whether supplies constitute electronically supplied services;
• Where customers are located and whether sufficient evidence is retained;
• Whether UK or overseas VAT registration obligations arise;
• Whether a platform or the underlying supplier is responsible for accounting for VAT; and
• Whether the VAT treatment of historic transactions remains appropriate.

GfC21 also explains how to correct VAT errors identified during this review.

How can we help?

HMRC's new guidance provides welcome clarity, but the VAT treatment of cryptoassets remains highly dependent on the facts and contractual arrangements.

If your business creates, sells or facilitates transactions involving NFTs, cryptocurrencies or other cryptoassets, now is a good time to review your VAT position.

Our VAT team can help you understand the implications of HMRC's new guidance, review current or historic transactions and advise on UK and international VAT obligations.

Get in touch with our VAT team to discuss how the new guidance could affect your business by filling out the short form below.