Re: Bitquestions
The position in the UK is:
If the bitcoins are held for business purposes, eg like a business bank account, it goes to “exchange gains / losses” in the accounts, and “loan relationship income” in the tax return, and it is taxed as income.
If a customer pays you in bitcoin, you convert it to pounds at the rate applicable on the date of transaction, record that amount as sales, and pay tax on it as if you received pounds. Same if you pay a supplier in bitcoin, convert to pounds and claim that as your business expense in the usual manner. Any change in value between sale / purchase / conversion, see above.
Basically the rules are the same as if you were trading in Euros / USD etc.
If it is held for personal purposes - to fund personal expenditure or as an investment, then it is taxed as a capital gain. The first £11,300 per year is covered by your annual CGT allowance.
Biting the hand that feeds IT
