If i earn (in Bitcoin) over the threshold, do i have to pay tax in UK?

[BitcoinSean]

If my website which earns me Bitcoins makes more than the Earning Threshold in the United Kingdom for when I must start to pay tax, do I still have to pay it? This may be a daft question because I am thinking I probably will still have too, but I am not entirely sure because I haven't yet earned that much and also using Bitcoin is a relatively new thing to me.

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[WompRat]

Are you converting the coins to pounds or keeping them as bitcoins? HMRC are currently thinking about changing how they treat bitcoin, so clarification should be forthcoming soon.  As the amount is small at the moment you should be able to wait for this decision before having to declare anything. 

[anonuser777]

Currently, if you're earning BTC and they remain as BTC then no tax is due in the UK. If you convert them to GBP then you are earning GBP and have to pay tax on it.

This is not tax advice, it's only my opinion gathered from various online sources. Consult a professional accountant / tax advisor if you are concerned.

[V4Vendettas]

Currently, if you're earning BTC and they remain as BTC then no tax is due in the UK. If you convert them to GBP then you are earning GBP and have to pay tax on it.

This is not tax advice, it's only my opinion gathered from various online sources. Consult a professional accountant / tax advisor if you are concerned.

Exactly what my UK accountant told me. Also he told me it would be treated under capital gains Tax.

[Test User]

In general, you would only pay tax at the time you converted the bitcoins to GBP. The decision as to how much would be due as income tax and how much as capital gains is not clear to me and expert advice should be sought.

Things are slightly different if you are getting a significant income as a business. If you are VAT registered, then any income for a VATtable service, must have the VAT paid based upon the transactions cash value on the day the transaction took place, even if the transaction was a barter transaction.

E.g. you run a website, and receive 15 BTC advertising revenue per month. You would be required to register for VAT, and you would need to submit a VAT return for the equivalent GBP transaction value on each day that you received any BTC.