Receiving payments in euro and accounting them.

[simes]

A little bit late to this particular party, and not even sure if it is aligned to what the previous chap was asking after... Bear with me. (I am only adding this issue to this thread since it is already there. I have yet to chuck this over the fence to my accountant as some of the below is still being worked on for resolution by the agent). So, for those who may have experience...

I am on a(nother) new contract which takes me to the NL from time to time.

- I am paid a day rate in £.
- But I have been asked to charge and receive my Expenses in Euros. Even the expenses incurred in £, I have been asked to convert into a Euro amount and add to an invoice.
- My normal experience thus far has been to add day rate plus expenses on one invoice, add VAT, pop into MTD and reconcile upon receipt.

My questions are;

1. How does one account for fluctuating currency rates between time of invoicing and time of receipting?
2. Should one add VAT to a Euro amount?
3. The currency exchange cost is an added cost implication.

To be clear, I am less fussed about the odd £5-10 variation than I am about the MTD rubbish that will have to be reconciled.

Thanks in advance.

[NotAllThere]

1. How does one account for fluctuating currency rates between time of invoicing and time of receipting?

I use the publish monthly average. Sometimes you win, sometimes you lose.

3. The currency exchange cost is an added cost implication.

Yes, and if the client agrees, then add a notional sum to the invoice to cover it.

No idea for your second question.

[simes]

Many thanks.

I don't think I was clear in ref to the below. Sorry.

Yes, I understand the 'publish monthly average' in terms of what one sticks on an invoice. My question here was more a case of what happens IF one has to add a £Expenses amount to an (MTD) invoice which, in the intervening period between invoice and payment of E Expenses, then changes and fluctuates.

To be frank, I am not sure there is an easy answer to this and to this end, I have actually offered the agent to pay my expenses separately to my personal account and bypass the whole Invoice / VAT / MTD debacle.

Let's see.

[NotAllThere]

Ultimately, it's between you and your client who bears the currency risk. As far as I am aware, there's no hard and fast rules. For book-keeping purposes using the monthly average has always been acceptable to my various local tax offices. Usually it's no more than a couple of quid each way, so not worth worrying about.

[Lance]

A little bit late to this particular party, and not even sure if it is aligned to what the previous chap was asking after... Bear with me. (I am only adding this issue to this thread since it is already there. I have yet to chuck this over the fence to my accountant as some of the below is still being worked on for resolution by the agent). So, for those who may have experience...

I am on a(nother) new contract which takes me to the NL from time to time.

- I am paid a day rate in £.
- But I have been asked to charge and receive my Expenses in Euros. Even the expenses incurred in £, I have been asked to convert into a Euro amount and add to an invoice.
- My normal experience thus far has been to add day rate plus expenses on one invoice, add VAT, pop into MTD and reconcile upon receipt.

My questions are;

1. How does one account for fluctuating currency rates between time of invoicing and time of receipting?
2. Should one add VAT to a Euro amount?
3. The currency exchange cost is an added cost implication.

To be clear, I am less fussed about the odd £5-10 variation than I am about the MTD rubbish that will have to be reconciled.

Thanks in advance.

are you invoicing the agency for expenses? That would be normal.
And if so, what does the contract state about the billing currency?

If you're billing the client directly have you considered if there are any tax implications? I don't know if there are any, but I don't know dutch law.

[simes]

are you invoicing the agency for expenses? That would be normal.
And if so, what does the contract state about the billing currency?

If you're billing the client directly have you considered if there are any tax implications? I don't know if there are any, but I don't know dutch law.

Yes.

No mention of currency. Thanks for pointing out, but subsequent to my checking...

I might even suggest a separate Euro payment into my LtdCo account and I will subsequently remove as £ expenses. But for this amount Not to hit Invoices and VAT procedures.

[Lance]

Yes.

No mention of currency. Thanks for pointing out, but subsequent to my checking...

I might even suggest a separate Euro payment into my LtdCo account and I will subsequently remove as £ expenses. But for this amount Not to hit Invoices and VAT procedures.

If you're billing the agency then you apply VAT as normal.

It's just weird that they want it done in Euros. Ring them and ask them. I would doubt that their payment department have agreed to this as it's an awful lot of admin for no benefit whatsoever. They might be getting paid in Euros but as long as the exchange rate is not abused by one party it would work out just fine for it to be done in GBP.

Sounds like a thick as mince agent making decisions that are beyond his remit.

[simes]

If you're billing the agency then you apply VAT as normal.

It's just weird that they want it done in Euros. Ring them and ask them. I would doubt that their payment department have agreed to this as it's an awful lot of admin for no benefit whatsoever. They might be getting paid in Euros but as long as the exchange rate is not abused by one party it would work out just fine for it to be done in GBP.

Sounds like a thick as mince agent making decisions that are beyond his remit.

Well, so far agent and agency seem top drawer. No complaints with them at all.

Bizarrely, I am UK based but while the agency is also based in the UK, the client's paying department is NL based. So originally, the agency wanted to pay me in Euros. That got sorted for a UK£ day rate, but the expenses issue seems one step behind the sorting of the day rate issue.

So, the agency already has a currency fluctuation issue on their hands. Bless 'em for taking this on the chin... I think so far it is just a system set up that is befouling the expenses subject.

But, if I had to invoice the agency in part £ and part Eu, plus VAT on top of all, it'd be one weird-ass looking invoice.

£Day rate + £VAT = £Total

(£Expenses converted to) Eu Expenses + Eu Expenses = Eu Total Expenses. Converted to Total £Expenses + £VAT = £Total

I almost can't wait...