Should my business accept crypto currency as payment?

With the growing popularity of cryptocurrencies, some businesses have started to accept crypto payments. Accepting crypto works well for some companies but how do you decide if it is right for your business? This blog will share some information that may help you to decide, although we always recommend taking professional advice before you adopt it as a new payment method.

What is cryptocurrency?

In simple terms, cryptocurrency is a form of digital money. It is considered to be ‘secure’ as it uses computer code that is unbreakable (well, almost!), and it’s a very fast payment – they are sent instantly and only take a few minutes to be confirmed.

Some people think of crypto as cash because it is a form of digital money. However, cryptocurrencies are not cash because they cannot readily be exchanged for any good or service, and do not represent legal tender. There is no requirement to accept crypto as payment.

Should I accept crypto as payment for invoices?

From a business perspective, accepting crypto currencies for payments is appealing as transactions cannot be faked or reversed thus providing a peace of mind for the customer and the business.

Before you begin accepting cryptocurrency payments, you need a crypto wallet and exchange account in which you will receive payments. You can either set up an account on your own without using a third-party processor or you can sign up with a payment provider that converts the currency for you. Using a provider is easier but it will cost you either per transaction or when you cash out and move money into your bank account. If you set up your own wallet, you need to decide what type of currency you will accept as different wallets accept different currencies. You also need to programme your wallet with addresses, transfers, security and interface to make the payment.

If you already sell products or services on platforms such as Etsy or Shopify, these platforms often partner with payment processors like Coinbase and Bitpay, which allow users to accept payments in crypto currencies.

Be aware of this if trading with crypto currencies

Taxation on crypto payments in the UK can be complicated. Both Capital Gains Tax and Income Tax apply and you’re required to report any capital gains or income in your annual tax return. It is important to correctly calculate and report each taxable transaction.

The other issue is that the value of crypto currencies fluctuate considerably so you are risking how much you will actually receive when you transfer your crypto into your bank account. Significant daily swings in value

are not uncommon. Any business that is accepting crypto payments needs to track its value on the day it was received and the day it was sold to see if it works for your business.

Anyone can use cryptocurrency. You do not need to get permission to set up a wallet or send transactions. Just check that using crypto works for your business and be aware of the tax liabilities that you may encounter.

If you want to discuss tax, invoicing or payment methods such as crypto,, do give us a call. Not only can we help with your questions, we can offer you support with your payroll, management accounting and so much more. You can contact us on 01992 444466. We’re accountants for business and for people. We’re here to help.

If you have any questions about what is and what is not allowed to be claimed as a business expense, do call us on 01992 444466. We’re accountants for business and charities, and we’re here to help.

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The information contained above is for general guidance purposes only. Whilst every effort has been made to ensure the contents are accurate, please note that each individual has different circumstances and it is essential that you seek appropriate professional advice before you act on any of the information contained herein. HB Accountants can accept no liability for any errors