<p>If you receive 500 EUR as a payment, how do you declare it?</p>

<p>Easy, you declare it as however much GBP it was at the time. If you receive it as a wire transfer your bank will even make this conversion for you!</p>

<p>So with BTC if you receive 2.5 BTC you have to see what the GBP value is and declare that as your receipts, and pay VAT and whatever other taxes on it.</p>

<p>Of course you can choose to lie to the tax man, but remember that Bitcoin is a lot easier for them to track than even your bank account, unless you are very good at operational security and you use something like Monero to separate your transactions. Obviously this is not worth it if you end up having to turn most of it into fiat to pay suppliers anyway.</p>

CC BY-SA 3.0
2016-06-03T15:28:57.463Z
2016-06-03T15:28:57.463Z
Савва Бирюков
<p><strong>Background:</strong></p>

<p>I have programmed my own service using <a href="https://bitcore.io" rel="nofollow">https://bitcore.io</a> and I have a limited company set up in the Uk! My company's original intention was to deal with Paypal transactions. (but we are now going to <strong>only</strong> use Bitcoin!)</p>

<p>We plan to only accept BTC ,only pay and make trades in BTC (never converting money within the company to pounds or any other fiat currency).</p>

<blockquote>
  <p>Additionally I am recording every transaction and payment in my database - for the record and in case the tax man would need to take a look at what is going on.</p>
</blockquote>

<hr>

<p>To put it very simply; my company has two instances of dealing with Bitcoin:</p>

<ol>
<li>A user buys my product with Bitcoin and I collect it in my own private key</li>
<li>A user requests a payment from me. I pay them in bitcoin to a public address of their choice using another private key of mine</li>
</ol>

<hr>

<p><strong>My question is:</strong></p>

<p>If my company is <strong>never dealing with any fiat money</strong>; what information should I be sending to the tax man?</p>

<p>It is a registered company after all (dealing with international clients) and I want to comply with the law.</p>

<p>What are my tax obligations?</p>

<hr>

<p>From <a href="https://www.gov.uk/government/publications/revenue-and-customs-brief-9-2014-bitcoin-and-other-cryptocurrencies/revenue-and-customs-brief-9-2014-bitcoin-and-other-cryptocurrencies" rel="nofollow">https://www.gov.uk/government/publications/revenue-and-customs-brief-9-2014-bitcoin-and-other-cryptocurrencies/revenue-and-customs-brief-9-2014-bitcoin-and-other-cryptocurrencies</a></p>

<ul>
<li>when Bitcoin is exchanged for Sterling or for foreign currencies,
such as Euros or Dollars, no VAT will be due on the value of the
Bitcoins themselves </li>
<li>charges (in whatever form) made over and above
the value of the Bitcoin for arranging or carrying out any
transactions in Bitcoin will be exempt from VAT under Article
135(1)(d) as outlined at 2 above </li>
</ul>

<p>However, in all instances, VAT will
   be due in the normal way from suppliers of any goods or services sold
   in exchange for Bitcoin or other similar cryptocurrency. The value of
   the supply of goods or services on which VAT is due will be the
   sterling value of the cryptocurrency at the point the transaction
   takes place</p>

<p>So I am to say nothing?? O.o</p>

CC BY-SA 3.0
2016-05-30T20:21:22.917Z
It depends on what your business is and what country you're in.
Nick ODell
CC BY-SA 3.0
2016-05-30T20:30:11.520Z
digital goods based in the uk
Ben Muircroft
CC BY-SA 3.0
2016-05-31T00:30:43.990Z
Last paragraph seems to make it pretty clear: when you sell an item for, say, BTC 2.5, you determine the market value of BTC 2.5 in GBP at that moment, and you owe VAT on that amount.
Nate Eldredge
CC BY-SA 3.0
2016-07-04T18:27:35.207Z
I think stackexchange is a bad place for location specific professional financial/legal advice. Contact an accountant and/or a lawyer.
Pieter Wuille
CC BY-SA 3.0
2016-11-02T09:42:00.913Z
I depends on the type of digital goods, are these goods vouchers? Vouchers have no VAT!
Stefan
<taxes><regulation><united-kingdom>
Rolled out my own no-fiat service. What will the tax man need?
Ben Muircroft
# Rolled out my own no-fiat service. What will the tax man need?

(Asked by: username_0 on 2016-05-30)

**Background:**

I have programmed my own service using <https://bitcore.io> and I have a limited company set up in the Uk! My company's original intention was to deal with Paypal transactions. (but we are now going to **only** use Bitcoin!)

We plan to only accept BTC ,only pay and make trades in BTC (never converting money within the company to pounds or any other fiat currency).

> Additionally I am recording every transaction and payment in my database - for the record and in case the tax man would need to take a look at what is going on.

---

To put it very simply; my company has two instances of dealing with Bitcoin:

1. A user buys my product with Bitcoin and I collect it in my own private key
2. A user requests a payment from me. I pay them in bitcoin to a public address of their choice using another private key of mine

---

**My question is:**

If my company is **never dealing with any fiat money**; what information should I be sending to the tax man?

It is a registered company after all (dealing with international clients) and I want to comply with the law.

What are my tax obligations?

---

From <https://www.gov.uk/government/publications/revenue-and-customs-brief-9-2014-bitcoin-and-other-cryptocurrencies/revenue-and-customs-brief-9-2014-bitcoin-and-other-cryptocurrencies>

* when Bitcoin is exchanged for Sterling or for foreign currencies,
  such as Euros or Dollars, no VAT will be due on the value of the
  Bitcoins themselves
* charges (in whatever form) made over and above
  the value of the Bitcoin for arranging or carrying out any
  transactions in Bitcoin will be exempt from VAT under Article
  135(1)(d) as outlined at 2 above

However, in all instances, VAT will
be due in the normal way from suppliers of any goods or services sold
in exchange for Bitcoin or other similar cryptocurrency. The value of
the supply of goods or services on which VAT is due will be the
sterling value of the cryptocurrency at the point the transaction
takes place

So I am to say nothing?? O.o

**Tags:** taxes, regulation, united-kingdom

> **Comments:**
> **username_1**: It depends on what your business is and what country you're in.  
> **username_0**: digital goods based in the uk  
> **username_2**: Last paragraph seems to make it pretty clear: when you sell an item for, say, BTC 2.5, you determine the market value of BTC 2.5 in GBP at that moment, and you owe VAT on that amount.  
> **username_3**: I think stackexchange is a bad place for location specific professional financial/legal advice. Contact an accountant and/or a lawyer.  
> **username_4**: I depends on the type of digital goods, are these goods vouchers? Vouchers have no VAT!  

---

## 1 answers

### Answer by username_5 on 2016-06-03. Score: 1

If you receive 500 EUR as a payment, how do you declare it?

Easy, you declare it as however much GBP it was at the time. If you receive it as a wire transfer your bank will even make this conversion for you!

So with BTC if you receive 2.5 BTC you have to see what the GBP value is and declare that as your receipts, and pay VAT and whatever other taxes on it.

Of course you can choose to lie to the tax man, but remember that Bitcoin is a lot easier for them to track than even your bank account, unless you are very good at operational security and you use something like Monero to separate your transactions. Obviously this is not worth it if you end up having to turn most of it into fiat to pay suppliers anyway.


---

