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:
- A user buys my product with Bitcoin and I collect it in my own private key
- 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?
- 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