How to Accept Cryptocurrency Payments as a Private Entrepreneur

WhitepayPosted 12.05.2023 • 7 mins read
WhitepayNewsHow to Accept Cryptocurrency Payments as a Private Entrepreneur
How to Accept Cryptocurrency Payments as a Private Entrepreneur

Everything entrepreneurs need to know about accepting crypto payments for their businesses, as well as its legal and tax status.

Did you know that over 52% of UK crypto owners use digital assets for spending?* By accepting crypto payments, businesses can tap into a new customer base and increase their income. This article covers how the regulation and taxes of cryptocurrencies in England and Wales work. Additionally, we will review a crypto payment processor for businesses you can start using almost immediately.

1eng_1920x600.pngHow to safely accept cryptocurrency as an individual entrepreneur

Individual entrepreneurs can accept digital assets through specialized crypto payment processors for businesses like Whitepay. With our software, your customers can settle payments with digital assets. Still, the income can be automatically converted to the national currency, deposited into the company's bank account, and taxed according to the standard procedure. 

For individual entrepreneurs, our company offers the following services:

In addition, Whitepay provides a convenient dashboard that enables our customers to manage fees, connect POS terminals, generate reports, and view transaction details. We offer a demo version of the personal account that allows you to familiarize yourself with the functionality before making a decision.

Which type of business can accept cryptocurrency payments?

All types of businesses can accept cryptocurrency in Wales and England through Whitepay because entrepreneurs tax their income in the national currency. We provide help at all stages of software integration to make accepting crypto payments for businesses as easy as accepting bank cards.

Furthermore, the use of cryptocurrencies provides a unique opportunity to avoid the banking bureaucracy in the UK. Traditional financial systems are often fraught with regulations, red tape, and other barriers that make it difficult for individuals and businesses to access the services they need. Digital assets, on the other hand, offer a decentralized and borderless alternative that can facilitate fast, low-cost, and secure transactions without intermediaries.

Cryptocurrency regulation in England and Wales

England and Wales's cryptocurrency regulation has been a topic of significant interest in recent years. The government and regulatory bodies have taken steps to provide guidance and establish a regulatory framework for the use of digital assets in the countries.

The Financial Conduct Authority (FCA) is the regulatory body responsible for overseeing the use of cryptocurrencies in England and Wales. The FCA has classified cryptocurrencies as "exchange tokens," which are not considered to be legal tender but can be used as a means of exchange.

Businesses that accept cryptocurrencies as payment must comply with anti-money laundering (AML) and counter-terrorist financing (CTF) regulations. This includes carrying out customer due diligence and reporting any suspicious activities to the authorities.

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Additionally, businesses that hold digital assets on behalf of their customers are subject to the FCA's custody rules. These rules require companies to hold cryptocurrencies in a way that ensures their safety and security.

While the regulatory framework for cryptocurrencies in England and Wales is still evolving, businesses that wish to accept digital assets as payment must comply with existing AML and CTF regulations.

2eng_1920x600.pngTaxation of сryptocurrency in England and Wales 

Here is the information about the tax status of cryptocurrencies in England and Wales:

  • Value-added tax (VAT). 
    The sale of cryptocurrencies is generally exempt from VAT in England and Wales. However, businesses that provide services in exchange for cryptocurrencies may be subject to VAT. In these cases, the value of the cryptocurrency at the time of the transaction is treated as the equivalent value in fiat currency.
  • Income tax. 
    Businesses that accept cryptocurrencies as payment must declare the income received in their annual tax returns. This income is subject to income tax, and companies must calculate their taxable profits in fiat currency based on the digital asset's value at the time of the transaction.
  • Inheritance tax.
    Cryptocurrencies are considered to be a type of property in England and Wales and are, therefore, subject to inheritance tax in the event of the owner's death.

We at Whitepay can assist you with navigating the complexities of tax regulations and cryptocurrency transactions, providing tailored advice and support. 

3eng_1920x600.pngProspects of сryptocurrency for business

Accepting crypto payments for business provides numerous benefits: 

  • Low transaction fees. 
    Cryptocurrency payments are cheaper than bank payments. For instance, fees for using the Bitcoin network can range from 0% to 1%, whereas banks charge between 0.5% to 3% for their services.
  • Attracting a new category of customers. 
    With the growing popularity of cryptocurrency in England and Wales, many businesses in the IT sector are now accepting digital currencies as a form of employee compensation. In the United Kingdom alone, there are approximately 4.2 million owners of digital assets, making it a prime market for crypto-based transactions. By introducing crypto acquiring, businesses have an excellent opportunity to attract a new category of customers who prefer to pay with crypto.
  • Competitive advantage. 
    By adopting new technologies, businesses demonstrate their readiness to innovate and evolve, which is especially attractive to the new generation of customers who are investing in cryptocurrency and expect companies to keep up with the latest trends.
  • High level of security. 
    Cryptocurrency is primarily a technology that uses encryption to secure transactions. This makes it less vulnerable to fraud and hacking compared to traditional payment methods. In addition, accepting crypto payments has a great advantage for businesses  — there are no chargebacks.
  • Global coverage. 
    Cryptocurrencies can be used to send and receive payments worldwide. This can be especially useful for international companies.
  • Decentralized control. 
    The decentralized structure of cryptocurrencies sets them apart from traditional payment methods that are controlled by centralized organizations like banks. Digital assets operate without the need for intermediaries, allowing for more direct and secure transactions between individuals. This decentralized structure also increases transparency and reduces the risk of fraud or corruption by third parties. 

Benefits of accepting crypto payments for businesses

Cryptocurrency is an effective business tool. More than 85% of merchants in the US consider the integration of cryptocurrency payments to be a priority. And here is why:

  • there are no restrictions from international payment systems like SEPA and SWIFT;
  • the number of new customers can be increased by 40%;
  • the average ROI of businesses in the US that accept cryptocurrency was 327% per year;
  • payments can be accepted from any country and any cryptocurrency wallet;
  • there are no chargebacks;
  • the transfers cost less;
  • you are independent from the banking system.

With Whitepay crypto acquiring, you can experience all of these benefits firsthand!

*According to TripleA