for me I have told them nothing so far. For one reason I have not transferred any money into my account. I have exchanged bitcoins into items ie gfx cards and silver.

So what am i meant to tell them. ohh i had some bitcoins and I got some silver and a gfx card. what do i owe ya. They would think i was nuts

Ive been doing business in virtual worlds for a couple of years (both buy low sell high speculation and actual business), only records i ever delivered to my taxman is the actual withdrawal (and deposit), nothing inside of the virtual world. I consider mtgox a virtual world aswell

If you MUST declare it all, I'd try to make it look like bog-standard FX trading. Bitcoin is just another currency, right? And if you account for all transactions as standard FX movements then your average taxman will understand *everything* you're doing. This is probably your best bet if all you're doing is trading... if you're actually selling goods and services (whatever those may be) then you'll end up having to explain exactly *what* those goods and services really are. Whether you would appreciate this is your business entirely...

...catfish

RE: records - if you have:
o date bitcoins bought, quantity, price, where from
o date bitcoins sold, quantity, price, who to

I think that would cover it