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I've been trading BTC in the UK via bank transfer for a while now and may begin doing cash purchases soon. I've realised that it is critical I document the cash withdrawal as an expense so that I get taxed only on the profit and not the entire turnover of the bitcoin sale. Usually this is done via the means of keeping receipts - so I guess I could have some sort of receipt that documents the exchange but I'm not sure where to begin.

What kind of information do I put on it? What is the bare minimum information I need on the seller? Considering it is me issuing this document it's not exactly an invoice or a receipt, is there a word for it?

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Begin by asking your local tax authority. They would be the ones able to give you a proper definitive answer.

  • -1 This is always true for this kind of question, and the asker knows it unless he's dumb. If an answer doesn't add anything to that, it's not an answer. – o0'. Feb 12 '13 at 9:56
  • The question is not whether you like the answer or not, it's whether the answer is correct or not. By visiting his local tax office the OP will also get valuable information regarding VAT. Because buying and selling Bitcoin has VAT implications if you do it as a corporation, and above certain thresholds you can not transact as a private individual anymore. Like it or not it is the correct answer to the question that was asked. – David Feb 12 '13 at 13:57
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    It may be a correct answer, but that doesn't make it a useful one. – Nick ODell Feb 12 '13 at 16:44
  • Maybe suggest an useful answer then. – David Feb 12 '13 at 20:32
  • Upvote. I think this is actually the correct and only answer. It is also useful. There is a toll-free number. Ask HMRC. – zkilnbqi Nov 23 '13 at 8:53

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