Tax legal question UK , VAT

[altruista]

Found this:

  - https://en.bitcoin.it/wiki/Tax_compliance
  - https://en.bitcoin.it/wiki/How_to_accept_Bitcoin,_for_small_businesses

But I don't see answer there.

Let's say I have an VAT business.

I sold a laptop for 100 BTC.

How do I put it in accounting?

It's easy even with paypal, but how can I do it using BTC?

I am worried about accounting. If it's possible:

Can you show me SINGLE UK VAT BUSINESS WHICH IS SELLING GOOD FOR BTC? - and I don't mean company registered in costarica, any cheats etc. Just simple accounting for uk seller trading goods for btc

And - CAN YOU SHOW ME EXAMPLE OF VAT INVOICE USING BTC CURRENCY? IS THERE ANY EUROPEAN COMPANY WHICH DOES SUCH INVOICES?

Please mind I don't want any legal cheats.

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[Lethn]

I'd like to know this as well because I'm in the UK and they don't seem to have said much about Bitcoin yet so it makes things pretty awkward for me tax wise too, if I do start getting a lot of Bitcoins it will be handy to know about this sort of thing.

[Luno]

Not being on the same continent as you guys, I would imagine that if you sell domestically, as a business there is no way to avoid paying VAT. You can of course pay the VAT in £ but that would be kind of a markup on Bitcoin that way.

If you match the sale with a similar purchase to your inventory, you can see it as paying by having to take on extra goods for selling on a later date.

If your business exports anything you have a similar situation if you buy anything with Bitcoin: Normally you can reclaim the VAT you payed when the product was purchased, when you sell it without VAT as export.

I can't really see that there is a way out of it, maybe as Bitcoin is not recognised as a currency taxwise, it might be possible to view a Bitcoin sale as an exchange of two goods of similar value with no money involved?

[altruista]

If you guys wonder why there is no shops accepting bitcoins there is an answer.

Simply if you start messing with taxes all your business can be shut down in days, and there is no simple answer how to deal with bitcoins anywhere.

[Stephen Gornick]

If you guys wonder why there is no shops accepting bitcoins there is an answer.

What you can do is use a payment processor to convert the bitcoins to your local currency for you and you never even need to consider what impact bitcoin has on your end.


BitPay will process bitcoin payments and send UK bank withdrawals.

 - http://www.BitPay.com


WalletBit is another which will provide payment processing with GBP payout.

 - https://walletbit.com/pricing

[altruista]

thanks but still i don't have answer how to put bitcoins in accounting

converting bitcoins to gbp have no point for me

[Rugatu]

thanks but still i don't have answer how to put bitcoins in accounting

converting bitcoins to gbp have no point for me

Interesting question, probably you could get a better answer, and 0.01btc, if you ask it on rugatu.com

https://bitcointalk.org/index.php?topic=147119

[Lethn]

Simply if you start messing with taxes all your business can be shut down in days, and there is no simple answer how to deal with bitcoins anywhere.

If it weren't for the central banks it wouldn't be such a difficult thing to deal with because they cluster fuck everything they come into contact with and make it unnecessarily complex. I'm considering writing an email to Customs and Revenue about this and I'll see what they have to say about it but I'm not really expecting much.

[malevolent]

If I were you I would accept Bitcoins and immediately convert them into fiat - either with Bitpay (or a similar service) or by yourself. For the purposes of accounting use the fiat currency after conversion. Haven't done it myself because I don't own a business in UK but maybe this would suffice.

[j05h]

Wouldn't it work the same as any other non local currency?  Add the VAT % to the purchase.  Pay the tax in your local currency.

[altruista]

> Wouldn't it work the same as any other non local currency?  Add the VAT % to the purchase.  Pay the tax in your local currency.

I do same thing with international payments, for example I can just create invoice in Euros or Dollars, is all legal, then I put exchange rate and pounds in my accounting (from date of purchase*), but the thing is BTC is NOT LEGAL CURRENCY :/ This is why I asked for sample invoice/company in UK who is dealing with BTC.

* please notice if I have bank in Germany and I received EUR I don't need to convert EUR>GBP in the same day which makes this case more complicated! (sales book vs cash book)

another thing is VAT which makes me headache when I think how to deal with it.

> I'm considering writing an email to Customs and Revenue about this and I'll see what they have to say about it but I'm not really expecting much.
Same as me, but Bitcoins are really new thing in law and taxation world so I wish you good luck

[TehTDK]

How come BTC is not a legal currency?. Its a currency.

Technically you should be able to take payment in bottlecaps for any items you sell, its gonna be a bad practise, but you can.... or not?

What I would do is list the item at xx BTC, but before putting it up I would have looked at the current exchange rate for GBP vs BTC and given myself a bit of favour on the exhange and then just account the GBP value of the sale, and not the BTC value.

[altruista]

> How come BTC is not a legal currency?. Its a currency.
looks like currency, but it's not (by EU and UK law) so it makes me headache as I am vat registered seller and I want to operate fully legal

> What I would do is list the item at xx BTC, but before putting it up I would have looked at the current
> exchange rate for GBP vs BTC and given myself a bit of favour on the exhange and then just account the
 > GBP value of the sale, and not the BTC value.

Sounds great with (for ex.) EUR, but I said BTC is not legal currency :/ (at this moment)

I COULD DO THIS only if some trade market would be considered as bank, where I can get a proof of exchange rate, but again - BTC is not legal currency....

[muyuu]

Nice try Osborne.

[altruista]

> Nice try Osborne.
I am not too good with politics, can you tell me what's on your mind?

[altruista]

anyone?

[DigitalDroid]

thanks but still i don't have answer how to put bitcoins in accounting

converting bitcoins to gbp have no point for me

The same way you'd use any other currency. If your business accepts payments in let's say USD, EUR and GDP, then you'd have at least 3 accounts in your books. One for each currency. If you want to start issuing invoices denominated in BTC, you'd simply add an account for that currency.

Do a search for "multiple currency accounting" or ask your accountant. He may not be familiar with bitcoin, but handling multiple currencies shouldn't be problem for him.

[DigitalDroid]

1 addition:

Most countries in the EU require you to mention the VAT amount in their local currency on the invoice. So if you sell something for 100 BTC and the VAT rate is let's say 20%, the total becomes 100BTC + 20BTC = 120BTC and then you'll need to calculate how much 20BTC is in your local currency, GDB in your case) and mention that on the invoice.

example:
------------------------

Product	Price
WidgetA	40 BTC
WidgetB	60 BTC

Subtotal:	100 BTC
VAT %:	20%
VAT:	20 BTC
VAT (GDP):	1428.8227
Total:	120 BTC

------------------------

[No_2]

Found this:

  - https://en.bitcoin.it/wiki/Tax_compliance
  - https://en.bitcoin.it/wiki/How_to_accept_Bitcoin,_for_small_businesses

But I don't see answer there.

Let's say I have an VAT business.

I sold a laptop for 100 BTC.

How do I put it in accounting?

It's easy even with paypal, but how can I do it using BTC?

I am worried about accounting. If it's possible:

Can you show me SINGLE UK VAT BUSINESS WHICH IS SELLING GOOD FOR BTC? - and I don't mean company registered in costarica, any cheats etc. Just simple accounting for uk seller trading goods for btc

And - CAN YOU SHOW ME EXAMPLE OF VAT INVOICE USING BTC CURRENCY? IS THERE ANY EUROPEAN COMPANY WHICH DOES SUCH INVOICES?

Please mind I don't want any legal cheats.

This UK developer has been accepting bitcoin for a while now:

missing-ink.com

[bsost]

Tricky question, because from a legal standpoint, only Sterling is legal tender in the UK, but you also legally entitled to make trades for goods or services with or what ever you so want, including bitcoins. So as for the tax, in your case it's clearly wealth income, i would say ask HMRC, how tax is liable on a transaction not conducted in sterling.

Perhaps see;

https://en.wikipedia.org/wiki/Pound_sterling#Legal_tender_and_regional_issues