If you have only used cryptocurrency to purchase goods and have never made a profit, you do not owe any tax, and you do not need to report anything to HMRC.
However, you still must fill out the Coinbase tax detail prompt. Because the law requires Coinbase to collect a National Insurance (NI) or Unique Taxpayer Reference (UTR) number from every user, they cannot make an exception based on how you use your account.
Why Spending Crypto Technically Counts as a "Disposal"
Even if you do not owe anything, it helps to understand why the system flags your account:
• Crypto is not treated as currency: HMRC classifies cryptocurrency as property/assets, not money.
• Spending it is a sale: In the eyes of the law, when you use crypto to buy a product, you are technically "disposing" of an asset (selling it for the value of the item you bought).
• How profit is calculated: If the market value of the crypto went up between the exact moment you acquired it on Coinbase and the moment you spent it, that increase is viewed as a capital gain.
Why You're Completely Safe From Taxes
Even if your crypto fluctuated slightly in value before you spent it, you are protected by two factors:
1. No Actual Profit: Since you usually buy crypto and spend it almost immediately for purchases, there is typically no price growth, meaning your profit is effectively zero.
2. The Annual £3,000 Allowance: For the 2026/2027 tax year, every UK citizen receives a tax-free Capital Gains allowance of £3,000. Even if you accidentally made a tiny profit due to rapid market movements while making a purchase, you would only ever need to report it or pay tax if your total gains across the entire year exceeded £3,000.
What You Should Do Next
Simply provide your National Insurance number on the Coinbase prompt. Coinbase will log it to satisfy HMRC's background compliance check, and because your transaction volume is small and zero-profit, it will simply sit on your record with nothing to pay.
