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Business registration and support in Great Britain CRYPTOCURRENCY CLEARINGS IN THE UK

Mykola Sirenko

Lawyer

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sirenko@prikhodko.com.ua

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Expert in corporate and international corporate law. Has extensive experience in supporting the acquisition of financial licenses in Ukraine, as well as business incorporation in the EU, the United Kingdom, Switzerland, the UAE, and key Asian jurisdictions.

CRYPTOCURRENCY CLEARINGS IN THE UK

In a globalized world, digital cryptocurrencies and digital currencies have become an integral part of the global economy. In some jurisdictions, the dynamics of cryptocurrency regulation are greater, in others – less.

However, if we talk about the United Kingdom – one of the most developed financial jurisdictions in the world – it has not been left out of this sphere and is one of the leading jurisdictions in the field of cryptocurrencies and their regulations.

However, despite the openness of the British market to digital assets, cryptocurrency payments in the country remain legally regulated and have a number of restrictions that are worth knowing about.

Our Law Firm “Prikhodko & Partners” as an expert in the field of international law and compliance, provides full support in matters related to cryptocurrencies, blockchain infrastructure and regulatory requirements in the jurisdictions of the EU, the UK, the USA and the Middle East.

In this article, we will take a closer look at how exactly you can make cryptocurrency payments in the UK, what to pay attention to from a legal perspective, and what risks and opportunities open up for Ukrainians and businesses.

Let’s start with the status of cryptocurrencies in the UK

In the UK, cryptocurrencies are not legal tender. However, they are recognized as cryptoassets that can be used in settlements with the consent of the parties.

The regulator in this area is the FCA — Financial Conduct Authority, which sets rules for exchanges, payment services, and other participants in the crypto ecosystem.

The FCA divides cryptoassets into several categories:

Exchange tokens – typical cryptocurrencies, such as Bitcoin, Ethereum;
Utility tokens – tokens that provide access to certain services;
Security tokens – assets that have the characteristics of securities.

To conduct activities related to the exchange, storage or transfer of cryptocurrencies, it is necessary to have registration with the FCA that meets AML/CTF (Anti-Money Laundering / Counter-Terrorist Financing) requirements.

Is it possible to make payments with cryptocurrency?

Formally, yes, cryptocurrency payments between individuals or legal entities are permitted, subject to the voluntary consent of both parties.

This means that cryptocurrency can be used to pay for goods or services if agreed upon by the parties to the contract.

For example:

A freelancer can receive payment in BTC or ETH;
An online store can accept cryptocurrency through a payment provider (such as Coinbase Commerce or BitPay);

B2B companies can enter into contracts tied to cryptocurrencies.

At the same time, we draw your attention to the fact that this form of payment does not replace the pound sterling and does not exempt companies from tax and accounting obligations.

Tax accounting and disclosure

In Great Britain, cryptocurrencies are taxable in accordance with the instructions of HMRC (Her Majesty’s Revenue and Customs).

Key points:

Capital Gains Tax – applies to individuals who receive profits from the sale or exchange of cryptocurrency;
Corporation Tax – paid by companies that store or use cryptocurrencies in business;
VAT – may be charged on goods/services sold for cryptocurrency;
Tax residency – income in cryptocurrency is taxed according to the resident status of the payer.

Also, since 2022, there has been an obligation to declare income in cryptocurrency, and HMRC is actively cooperating with crypto exchanges to obtain information about users.

Banking restrictions and compliance

Despite gradual legalization, most UK banks are still skeptical about cryptocurrency transactions.

The risks are as follows:

Blocking accounts after large incoming or outgoing crypto transactions;
Requirements for explaining the source of funds and submitting additional documents;
Refusal to open an account for companies that work with cryptocurrencies.

To avoid blocking, it is recommended to:

Carry out transactions through licensed platforms;
Keep all checks, confirmations, and transfer screenshots;
Inform the bank in advance about the source of funds.

It will also be useful: REGISTRATION OF A BUSINESS IN THE UK

Legal risks and protection of parties

Since cryptocurrency is not considered legal tender, the legal validity of contracts concluded in cryptocurrency depends on proper legal formalization.

In the event of a dispute, the court may declare the contract invalid if:

Currency is not defined as a “usual” form of payment;
There was no fixing of value in fiat equivalent (e.g. in GBP);
The parties did not provide for a mechanism for exchange rate changes.

Thus, it is very important to legally protect yourself through a competent contract indicating:

Prices in cryptocurrency and its equivalent in GBP;
Force majeure in case of market volatility;
Wallet details of both parties;
Arbitration clause.

Crypto payments for business: what to consider

If you are planning to accept cryptocurrency as a company:

Register with the FCA (if you are a professional);
Develop internal AML/KYC policies;
Take into account the specifics of accounting;
Choose payment gateways that support legal integration with banks (e.g. MoonPay, Crypto.com Pay, CoinPayments);
Report regularly to tax authorities.

Conclusion

Cryptocurrency in the UK —This is not a forbidden phenomenon, but a legal part of the modern economy.

However, settlements with crypto assets require a professional approach, legal literacy, and financial transparency.

Without proper preparation, a business may face account freezes, tax sanctions, or disputes with counterparties.

How long does company registration take?

A standard electronic application to Companies House is usually processed within 24 hours. However, preparation of the structure, identity verification, obtaining an address, tax setup and account opening require additional time.

Who needs to complete identity verification?

Directors and persons with significant control — PSCs — must complete verification. Once completed, the individual receives a Companies House personal code used to confirm the relevant corporate role. Non-residents may also complete verification, including by using a biometric passport.

Where is the best place to open an account for a UK company with a non-resident director?

Since traditional UK High-Street Banks require a physical business presence, the fastest and most efficient solution for international companies is to open accounts with electronic money institutions (EMIs). Platforms such as Wise Business, Revolut Business and Payoneer are licensed by the FCA and provide full UK and international account details for transactions.

When must a company register for VAT?

The general threshold is £90,000 of taxable turnover over the previous consecutive 12 months or expected turnover during the next 30 days. Separate rules may apply to non-resident and cross-border models, so VAT should be analysed before sales begin.

Is a company required to file reports if it has not traded?

Yes, it is mandatory. Even companies with no operating activity must annually file so-called “Dormant Accounts” with Companies House and confirm the ownership structure through a Confirmation Statement. Failure to file these documents results in substantial penalties (from £150 to £1,500) and compulsory dissolution of the company, with its assets passing to the Crown.

Successful cases on the topic: