Does anyone know whether you need to pay VAT on products exchanged for BTC and if so how you calculate that?
You don't need to charge VAT until your turnover is above some large amount, something above £50000 per year. By the time you reach that level, someone will have worked out how VAT applied to Bitcoin businesses.
I suggest you go to the newsagent and get the magazines for market traders. They are full of ads for suppliers who will give good discounts on reasonably small orders.
Excellent! That makes things a bunch easier! So as I understand it, I can operate as a Sole Trader usually would, keeping track of sterling costs of products and profits from sales of bitcoin?
Keeping that in mind, I'm very happy to announce
BitCoin's first tobacco shop! England only though for now, sorry guys
Now I just need to find a trusting first customer to give the rest the all clear.. Do people commonly use escrow services to get off the ground?