VAT is due on sales of Bitcoins within the United Kingdom. If the Bitcoins were purchased outside the United Kingdom (E.g. through a European exchange), then any sales taxes such as VAT are the responsibility of the seller *if* any such taxes were applicable in the jurisdiction in which they were sold. So, if you were buying Bitcoins from Bitstamp in Slovenia, VAT would not be due since Slovenia don't (I believe) class Bitcoin as a VATable commodity and if they did, it would be up to Bitstamp and/or the seller to ensure this was paid.

If you were selling your Bitcoins in the UK, you would be liable to charge VAT if the turnover from that transaction exceeded the VAT threshold (79,000 for the 2013-2014 financial period). So, in your case selling 40K of Bitcoins would not cause you to register for and charge VAT on the sale.

With regards to your proposal to launder the money, this won't work. To my fairly certain knowledge in order for the proceeds of gambling to tax exempt, the counter party (in this case Just-Dice) would need to have a gambling license (or equivilent for the jurisdiction in which they are registered). In effect, if you laundered your Bitcoins and received 39,500 GBP back, it would still be liable for tax and you'd just have given Just-Dice 500 GBP.

The whole tax applicability is a murky area, but as Germany are the only country to apply any semi-official recognition to Bitcoin, you can be pretty sure that as a UK owner:

-> VAT is due if you sell your Bitcoins and the turnover exceeds 79,000 for 2013-2014 financial year
-> Capital gains tax will be due after the realised gains from the sale exceed the personal allowance for the 2013-2014 financial year

Basically, they've got their hand in your pocket either way. On a separate note; Talk to an accountant if you are in *any* doubt - do not take my ramblings as gospel.