Rolled out my own no-fiat service. What will the tax man need? Background:

I have programmed my own service using https://bitcore.io and I have a limited company set up in the Uk! My company's original intention was to deal with Paypal transactions. (but we are now going to only use Bitcoin!)

We plan to only accept BTC ,only pay and make trades in BTC (never converting money within the company to pounds or any other fiat currency).


  Additionally I am recording every transaction and payment in my database - for the record and in case the tax man would need to take a look at what is going on.




To put it very simply; my company has two instances of dealing with Bitcoin:


A user buys my product with Bitcoin and I collect it in my own private key
A user requests a payment from me. I pay them in bitcoin to a public address of their choice using another private key of mine




My question is:

If my company is never dealing with any fiat money; what information should I be sending to the tax man?

It is a registered company after all (dealing with international clients) and I want to comply with the law.

What are my tax obligations?



From https://www.gov.uk/government/publications/revenue-and-customs-brief-9-2014-bitcoin-and-other-cryptocurrencies/revenue-and-customs-brief-9-2014-bitcoin-and-other-cryptocurrencies


when Bitcoin is exchanged for Sterling or for foreign currencies,
such as Euros or Dollars, no VAT will be due on the value of the
Bitcoins themselves 
charges (in whatever form) made over and above
the value of the Bitcoin for arranging or carrying out any
transactions in Bitcoin will be exempt from VAT under Article
135(1)(d) as outlined at 2 above 


However, in all instances, VAT will
   be due in the normal way from suppliers of any goods or services sold
   in exchange for Bitcoin or other similar cryptocurrency. The value of
   the supply of goods or services on which VAT is due will be the
   sterling value of the cryptocurrency at the point the transaction
   takes place

So I am to say nothing?? O.o
If you receive 500 EUR as a payment, how do you declare it?

Easy, you declare it as however much GBP it was at the time. If you receive it as a wire transfer your bank will even make this conversion for you!

So with BTC if you receive 2.5 BTC you have to see what the GBP value is and declare that as your receipts, and pay VAT and whatever other taxes on it.

Of course you can choose to lie to the tax man, but remember that Bitcoin is a lot easier for them to track than even your bank account, unless you are very good at operational security and you use something like Monero to separate your transactions. Obviously this is not worth it if you end up having to turn most of it into fiat to pay suppliers anyway.