Just had a meeting with my accountant today.
If your sales exceed 4 times CGT allowance ie 4X £11,100 £44,400 ye 2016 then even if your gain is under the annual allowance and no CGT is payable you still have to submit every single transaction. FFS.
Exceptions are sales reinvested same day and sales bought back up to 30 days later.
The transactions must be matched up, the paperwork involved is the stuff of nightmares.
As you say if trading is your business it's treated as income and is subject to income tax top tax rate 40% plus NI at 9% then 2% above £45k.
Yet if BTC collapsed and you wanted to offset the losses against your other capital gains, HMRC would suddenly declare BTC trading as a highly risky enterprise like gambling where no taxes are payable on wins or reliefs on losses.
I intend to only submit transactions to and from Fiat currency.
And this '4x allowance' thing? Not in any tax rule I have seen.
Get a second opinion, there is no real guidance yet that is this specific on crypto from HMRC.
Accountants are assuming things, but they MAY not be right.
Get yours to show you HMRC guidance specifying what you say above. A capital gain under the limit is not reportable AFAIAC and if it is over it, it is still simply a capital gain and chargeable at 20%.
You invested X, you sold Y - you pay the difference, I reckon. And capital gains are only taxable when cashed in IMHO.
I am not an accountant - but I asked three, and they all gave varying advice, except that they all said you need to say what you orginally paid for the BTC you are now selling. I realise that ain't easy - but it is possible to do most if you have exchange history. For Gox, you cannot - but neither can they prove what you spent unless your bank statements show it.