Your accountant's three questions, answered

Every conversation about accepting stablecoins ends in the same place: "I would have to ask my accountant." Quite right too. So here are the three things they will ask, answered properly rather than reassuringly.

1. How is the VAT handled?

VAT is due on the sterling value of the supply at the time it was made, whatever the customer paid in. That is not new or special — it is how VAT already works for any consideration that is not sterling.

The practical difficulty is that the sterling value at the moment of the transaction is a real figure that exists for about a second and then stops existing. Reconstruct it at quarter end from a period-average rate and you have an estimate, not a record.

So it has to be captured when it happens. Every payment is valued in sterling at its own timestamp, recorded against that transaction, and that figure is what the return is built from. Not derived later, not averaged.

The rest is ordinary. Output tax on the recorded values, the nine boxes as HMRC numbers them, an export in a form that can be filed. Mixed-rate invoices behave normally — zero-rated goods and standard-rated services on the same document, rate shown per line.

2. What about capital gains?

This is the question that catches people out, because most business owners do not think of themselves as holding an asset. They think they got paid.

But receiving a stablecoin is receiving an asset. The sterling value on receipt is trading income, and that same figure becomes the base cost. When you later dispose of it — converting to sterling, paying a supplier with it, anything that moves it on — that is a chargeable event, and the difference between base cost and disposal value is a gain or a loss.

On a stablecoin the movements are small. They are not nothing, and they still have to be worked out properly.

• Section 104 poolingAssets of the same type pool together with a pooled average cost, and disposals come out of the pool.
• The same-day ruleDisposals match first against acquisitions made the same day.
• The thirty-day ruleThen against acquisitions in the following thirty days, before touching the pool.

Applied in that order, automatically, on every disposal, with a dated calculation showing which rule matched and what basis was used. Your accountant can check the working rather than take it on trust, which is the point.

The hard part was never the payment. It was everything that has to happen afterwards.

3. Who is holding the money, and what happens if they go under?

Nobody is holding it. That is the honest and slightly unusual answer.

The payment goes directly from the customer's wallet to the business's own wallet. There is no intermediary account, no pooled client balance, no float sitting with a payment company. Ceodore observes the transaction and records it; it is never in the path.

Which means there is no third-party balance sheet between the client and their money. If the software company disappears, the wallet still works — it is an ordinary one, and the recovery phrase opens it in any standard wallet application without involving anyone.

For an accountant this is the material point. The usual risk in a payments arrangement is counterparty risk on whoever holds the float. Here there is no float to have risk on.

The fourth question, which they will also ask

"Can I see it?" Yes. A free accountant seat with read access across every company the client runs, on most plans. Not a shared login — a proper account with its own passkey.

From it they can pull the VAT return, the disposals report, the transaction ledger, the P&L and the balance sheet, at any point in the year rather than in a scramble in January. Everything posts to Xero against mapped nominal codes, so it lands where they expect it.