Last checked 29 October 2026. This page explains options in general terms and does not recommend a payment provider. If anything here conflicts with the linked source, the source wins.
A company can take bitcoin from customers straight into its own wallet, or through a provider that converts it. The practical side is the same in both countries. Tax and regulation differ, so each country has its own section.
- Invoice in pounds or dollarsThe price and any VAT or sales tax are set in the company's own currency.
- Customer paysThe bitcoin amount is fixed for a short window.
- ReceivedEither into the company 2 of 3 multisig, or converted by a provider.
- RecordedValue in pounds or dollars at the time, the invoice and the transaction ID.
The options
| Option | How it works | Points to weigh |
|---|---|---|
| Direct to the company wallet | The company gives the customer a fresh receiving address from its own 2 of 3 multisig for each invoice. | The company holds the bitcoin, with the price risk that brings. It must match payments to invoices itself. |
| A payment provider that converts | A provider receives the bitcoin and pays pounds or dollars to the company bank account, usually for a fee. | Little or no bitcoin is held. In the UK, check the provider on the FCA register. In the US, check its FinCEN registration and any state licence. Read who bears the risk if the price moves before conversion. |
| Lightning Network | A payment layer built on bitcoin, suited to faster, smaller payments. | Lightning wallets need keys online to work, so they do not fit cold 2 of 3 storage. Keep balances small and move them on regularly. |
Source: FCA: Financial Services Register, FCA: Cryptoassets: AML and CTF regime (registration, no FSCS or Ombudsman cover), FinCEN: MSB Registrant Search, Lightning Network: BOLT specifications (Basis of Lightning Technology).
UK: regulation
A company that receives payment for its own goods or services is not offering cryptoasset services to others. A company that converts bitcoin for other people, or holds it for them, may be: take legal advice. See rules and insurance.
UK: accounting and tax
- Trading income. HMRC says a trading company that accepts bitcoin as payment includes it in its taxable trading profits, at its sterling value.
- Sterling value at the time. Each receipt is converted to pounds at the time of the transaction, using a consistent, recorded method.
- VAT. VAT is due in the normal way on goods and services paid for in bitcoin, on the sterling value at the time of the supply. No VAT is due on the bitcoin itself. HMRC describes its VAT view as provisional.
- Invoices. A VAT invoice must show the total VAT in sterling. Invoicing in pounds and accepting the bitcoin equivalent keeps this simple.
- Spending or refunding in bitcoin. Paying a supplier, or refunding a customer, in bitcoin is a disposal of that bitcoin.
Source: HMRC: CRYPTO40350: Exchange tokens received or paid as part of a trade, HMRC: CRYPTO40100: Conversion to sterling and accountancy, HMRC: CRYPTO45000: VAT and cryptoassets (HMRC calls its view provisional), HMRC: Record keeping (VAT Notice 700/21): what a VAT invoice must show, HMRC: VAT guide (VAT Notice 700): amounts must be expressed in sterling, HMRC: CRYPTO41250: Corporation Tax on chargeable gains, what counts as a disposal.
How bitcoin kept after receipt is taxed on a later sale depends on the facts, and this site has not found HMRC guidance that settles every case. Ask your accountant. For the accounts side, see FRS 105 accounting and the accountant's corner.
US: regulation
FinCEN guidance treats a person who obtains virtual currency to buy goods or services as a user, not a money transmitter. New York's BitLicense rules exempt merchants and consumers who use virtual currency only to buy or sell goods or services. A company that converts or holds bitcoin for other people is in a different position and may need registration or a licence: take legal advice. Other states have their own rules, and this site has not checked every state. See US state rules.
Source: FinCEN: FIN-2013-G001: persons administering, exchanging or using virtual currencies, 18 March 2013, FinCEN: FIN-2019-G001: business models involving convertible virtual currencies (PDF), Cornell LII: 23 NYCRR 200.3: licence requirement and exemptions.
US: accounting and tax
- Income at fair market value. The IRS says "a taxpayer who receives virtual currency as payment for goods or services must, in computing gross income, include the fair market value of the virtual currency, measured in U.S. dollars, as of the date that the virtual currency was received".
- Basis. The basis of bitcoin received this way is its fair market value in dollars on the day it was received.
- Later sale or spend. Selling the bitcoin, or spending it with a supplier, is a disposal that gives a gain or loss against that basis. See the company tax page.
- Paying contractors in bitcoin. Payments for services made in virtual currency are reported at their fair market value, in the same way as cash, and are subject to backup withholding rules. For tax years beginning after 2025, the Form 1099 NEC and 1099 MISC reporting threshold for these payments is generally $2,000, and the IRS says it may be adjusted for inflation from 2027. Collect each contractor's taxpayer identification number before paying.
- Sales tax. Sales tax is set by each state, not the federal government. In New York, for example, the state tax department treats a payment in virtual currency as a barter: sales tax is due on the taxable goods or services at the dollar value of the bitcoin at the time, and the bitcoin itself is not taxed as a sale. Other states may differ. Check each state where you sell.
- Invoices. Invoicing in dollars, with any sales tax in dollars, and accepting the bitcoin equivalent keeps the records simple.
Source: IRS: Notice 2014-21: virtual currency is treated as property for federal tax purposes, IRS: Frequently asked questions on virtual currency transactions, IRS: Instructions for Forms 1099-MISC and 1099-NEC (threshold change for tax years after 2025), New York State Department of Taxation and Finance: TSB-M-14(5)C: tax treatment of convertible virtual currency (PDF).
Source: FASB: ASU 2023-08, Intangibles: Goodwill and Other, Crypto Assets (Subtopic 350-60).
Invoicing
- Show the price and any VAT or sales tax in pounds or dollars. Show the bitcoin amount, the rate used, and how long that amount is valid, for example 15 minutes.
- Use a fresh receiving address for each invoice so payments can be matched without confusion.
- Say in your terms how you handle underpayments, overpayments, late payments after the window, and refunds, including the rate used.
- Keep the invoice, the rate source, the transaction ID and the confirmation together.
Handling volatility
The price of bitcoin can move between the invoice and the payment, and while it is held. Common ways to handle this, in general terms:
Fix the bitcoin amount for a short time only, then requote.
Use a provider that pays out in pounds or dollars, or sell received bitcoin promptly under the policy.
Keep receipts only within the band the board has set in its treasury policy.
Refund in pounds or dollars at the original value, or state the rule in advance.
The policy guide and selling or rebalancing cover the board's rules.
Custody of receipts
A company 2 of 3 multisig can receive payments without any signing key being online. A watch only copy of the wallet, built from the public keys in the wallet descriptor, can show balances and create fresh receiving addresses, but cannot move funds. Spending still needs two of the three signing devices.
Source: Bitcoin BIPs: BIP 380: Output script descriptors, general operation (wallet backups and exports), Bitcoin BIPs: BIP 32: Hierarchical deterministic wallets (extended keys), Bitcoin developer documentation: Wallets guide: signing-only wallets and hardware wallets.
- For large invoices, ask the customer to check the address with you by a second channel, and check it on a signing device yourself.
- Wait for confirmations before treating a payment as settled.
- Sweep any Lightning or provider balance into the multisig, or convert it, on a set schedule.
See the custody guide and the how a transaction works explainer.
Read next
Sources
Primary sources only. Each link was checked on 29 October 2026. Rules change, so confirm the current version with your adviser.
- FCAFinancial Services Register
- FCACryptoassets: AML and CTF regime (registration, no FSCS or Ombudsman cover)
- FinCENMSB Registrant Search
- Lightning NetworkBOLT specifications (Basis of Lightning Technology)
- HMRCCRYPTO40350: Exchange tokens received or paid as part of a trade
- HMRCCRYPTO40100: Conversion to sterling and accountancy
- HMRCCRYPTO45000: VAT and cryptoassets (HMRC calls its view provisional)
- HMRCRecord keeping (VAT Notice 700/21): what a VAT invoice must show
- HMRCVAT guide (VAT Notice 700): amounts must be expressed in sterling
- HMRCCRYPTO41250: Corporation Tax on chargeable gains, what counts as a disposal
- FinCENFIN-2013-G001: persons administering, exchanging or using virtual currencies, 18 March 2013
- FinCENFIN-2019-G001: business models involving convertible virtual currencies (PDF)
- Cornell LII23 NYCRR 200.3: licence requirement and exemptions
- IRSNotice 2014-21: virtual currency is treated as property for federal tax purposes
- IRSFrequently asked questions on virtual currency transactions
- IRSInstructions for Forms 1099-MISC and 1099-NEC (threshold change for tax years after 2025)
- New York State Department of Taxation and FinanceTSB-M-14(5)C: tax treatment of convertible virtual currency (PDF)
- FASBASU 2023-08, Intangibles: Goodwill and Other, Crypto Assets (Subtopic 350-60)
- Bitcoin BIPsBIP 380: Output script descriptors, general operation (wallet backups and exports)
- Bitcoin BIPsBIP 32: Hierarchical deterministic wallets (extended keys)
- Bitcoin developer documentationWallets guide: signing-only wallets and hardware wallets
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This is general information and education only. It is not financial, investment, tax, accounting, legal or regulatory advice, and it is not a recommendation to buy, sell or hold bitcoin or any other asset. It does not take account of your circumstances or those of your company. You must obtain your own official professional advice to confirm this information is correct before acting on it.
Rules change. This information is correct to our understanding at the last-reviewed date, but it may be incomplete or out of date, and official sources take precedence. Bitcoin is volatile. A company that buys it could lose some or all of the money it puts in.
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