Invoicing in Euros - Bank Account Question

[expat]

My view on rates seems to be different to yours. Maybe it should only have been used for VAT. In any event it was a couple of years back since I did this.

http://customs.hmrc.gov.uk/channelsP...atesCodesTools
http://customs.hmrc.gov.uk/channelsP...ument#P41_2102

Also the guidance does let you use other rates but the advice I received was always to use the "official rate" because they can't argue about it.

Assuming one is maintaining accounts in GBP this only really leaves the problem of what rate to use to value the outstanding invoices at year end.

ISTM that my view on rates is exactly the same as yours, with the minor difference that I never did find an official HMRC rate, so used the BofE rate instead; on the understanding that (as I thought) there is no really official rate.

I also agree with you that if you use HMRC's rate then they can hardly argue about it.

[ASB]

Do you have a link please?

Pay via IBAN: indeed. Problem solved, no hassle.

My view on rates seems to be different to yours. Maybe it should only have been used for VAT. In any event it was a couple of years back since I did this.

http://customs.hmrc.gov.uk/channelsP...atesCodesTools
http://customs.hmrc.gov.uk/channelsP...ument#P41_2102

Also the guidance does let you use other rates but the advice I received was always to use the "official rate" because they can't argue about it.

Assuming one is maintaining accounts in GBP this only really leaves the problem of what rate to use to value the outstanding invoices at year end.

[expat]

It seems that everybody has slightly different experiences.

From a point of view of accounting there is an official rate which can be obtained from HMRC web site. This is updated monthly and is the value you should use for accounting purposes since you have to value this in sterling.

The difference between the "official" rate and the actual rate is book as either other expense or other income depending on which way round it happens to go.

From a view of payments we had Euro accounts at various times, however when we last banked with A+L I just got the clients to pay into this via the IBAN. They converted to euros - less fees of course, however the rate was OK.

Do you have a link please?

Pay via IBAN: indeed. Problem solved, no hassle.

[ASB]

It seems that everybody has slightly different experiences.

From a point of view of accounting there is an official rate which can be obtained from HMRC web site. This is updated monthly and is the value you should use for accounting purposes since you have to value this in sterling.

The difference between the "official" rate and the actual rate is book as either other expense or other income depending on which way round it happens to go.

From a view of payments we had Euro accounts at various times, however when we last banked with A+L I just got the clients to pay into this via the IBAN. They converted to euros - less fees of course, however the rate was OK.

[themistry]

Expat,

thank you very much for that link and a quick how to guide. Very much appreciated!

Kind regards
TM

[expat]

Thats frustrating.

So, what exchange rate did you use to get the £ value?

Last time, I called my bank (HSBC) on the day I was raising the invoice (they don't have anywhere online you can find out), since my main concern was to get as close as possible to the rate that would actually be applied to the payment.

This time I am getting a rate online from the Bank of England
http://www.bankofengland.co.uk/mfsd/...rue&Travel=NIx
by then opening "Spot Exchange Rates"
opening "Euro"
and checking "Daily XUDLERS",
going back up and clicking Show Data
changing from to this month, then clicing e.g. HTML.

Sorry I can't give you an end-result URL because it's dynamic.

BTW in http://www.hmrc.gov.uk/euro/faqs_lgbus.htm#3a HMRC says

If you invoice a customer for 200 euro, then use the spot rate for that day to convert to sterling for your accounts, and when you receive payment of 200 euro, then use the spot rate for that day to convert. Any difference in the two sterling amounts is an exchange rate loss or gain that should be reflected in your accounts. Alternatively, providing the exchange rate has not fluctuated too much, then the monthly average figure can be used for each transaction instead of the daily spot rate.
The Bank of England issues daily exchange rate figures, which can be found on the Bank of England website

I can't find a trace of the instruction to show GBP on your invoices, which was given to me by phone; but ISTM like a good way to document the first rate mentioned above (spot rate for day of invoice). Since it is then paid directly into the Co account, the bank statement covers part 2 ("when you receive payment"). Note that I am quite free to use my bank's actual rate and not the BofE spot rate, since this latter is not actually "official".

[themistry]

HMRC said that I had to put GPB on the invoice.

Thats frustrating.

So, what exchange rate did you use to get the £ value?

I will give my accountants a call.

Thanks
TM

[expat]

Hi expat,

thanks for the response.

I think i'm happy with that.

I would however just invoice in Euros. Then when the statement comes through, provide the accountant with the conversion details.

Thanks
TM

HMRC said that I had to put GPB on the invoice.

[themistry]

Hi expat,

thanks for the response.

I think i'm happy with that.

I would however just invoice in Euros. Then when the statement comes through, provide the accountant with the conversion details.

Thanks
TM

[chef]

I just pay into my GPB account. I have to put a GBP amount on my invoices as well as the EUR amount; HMRC then go by the GPB amount whereas the clien pay the EUR amount and the bank convert it, so I have an exchange profit/loss entry on the accounts, but that is trivial. I thought of opening a Euro account too but the cost was 6 and half a dozen so I went for convenience.

ditto, this is just a short term 3 month gig and im taking xmas off, according to HSBC the one off costs involved in paying direct to GBP account for me work out the same as the monthly cost of running an account so i decided not to beother opening a euro and paying for it when im not using it

[expat]

When I was invoicing in Euros, I opened a Euro account (I'm also with Cater Allen), and got the agency to pay directly into that account.

Once the money had been received, I transferred the money into my Sterling account and then entered the amount after it was transferred onto my accounting spreadsheet.

I think you can receive payments in Euros directly into a Sterling account and hence the above step is done automatically, but you may need to check with CA about this (and also check that the exchange rate is the same as transferring from a Euro account).

I just pay into my GPB account. I have to put a GBP amount on my invoices as well as the EUR amount; HMRC then go by the GPB amount whereas the clien pay the EUR amount and the bank convert it, so I have an exchange profit/loss entry on the accounts, but that is trivial. I thought of opening a Euro account too but the cost was 6 and half a dozen so I went for convenience.

[themistry]

When I was invoicing in Euros, I opened a Euro account (I'm also with Cater Allen), and got the agency to pay directly into that account.

Once the money had been received, I transferred the money into my Sterling account and then entered the amount after it was transferred onto my accounting spreadsheet.

I think you can receive payments in Euros directly into a Sterling account and hence the above step is done automatically, but you may need to check with CA about this (and also check that the exchange rate is the same as transferring from a Euro account).

Thanking you very much, exactly what I wanted to know.
TM

[kiboomiz]

When I was invoicing in Euros, I opened a Euro account (I'm also with Cater Allen), and got the agency to pay directly into that account.

Once the money had been received, I transferred the money into my Sterling account and then entered the amount after it was transferred onto my accounting spreadsheet.

I think you can receive payments in Euros directly into a Sterling account and hence the above step is done automatically, but you may need to check with CA about this (and also check that the exchange rate is the same as transferring from a Euro account).

[themistry]

Hi all,

I need to invoice my current client in Euros, however my Bank Account is in GBP (with Cater Allen).

I am just looking for opinions on the best way to do this.

1) Should I ask Cater Allen to open a Euro account, into which Euro funds are sent? Does anyone know how long this takes?

2) When my accounts are done (in GBP), do I declare some earnings in pounds and others in Euros? Or must I convert the euros into pounds at some point at a given rate?

Any help appreciated.
TM