Accounting for Foreign Currencies

[AccidentalEntrepreneur]

I'm starting to do some gig work for a company that pays out to Paypal in $US. This is converted to GBP in Paypal and withdrawn to a UK business bank account.

I trade as a Ltd co (no other employees or officers) and until now I've been filing CT return micro-entity accounts using the HMRC online system (with simultaneous filing to Companies House). Accounts are very simple, mostly just income and sundry expenses like stationery, travel and web hosting and the filing takes me little more than an hour. I work from home but I don't bother claiming for electricity, etc. So I've been keeping my transaction records and accounts in Excel spreadsheets.

I know that the online HMRC system can't be used to file where there are foreign currency transactions.

Any suggestions on the cheapest option to restructure my filing? I don't need an industrial strength Sage package or the like and I've managed until now without an accountant.

 

[numbersrule]

Hi Accidental Entrepreneur

Are you sure that the HMRC Online Filing restriction on foreign currency transactions is applicable to your case as described? It seems to me that if your income is received in GBP after a conversion within PayPal then is that not all that would need to be visible to the HMRC Online Filing? Just report your gig work as Foreign Income in GBP as received.

Keep a record of the original USD pay for your own reference in terms of the conversion.

 

[DontAsk]

I would tend to agree. If you don't keep a balance in USD (e.g., for buying stuff through PayPal, then just report what you get in GBP.

I have the opposite, paying for stuff in USD with a debit card. The bank convert it and debit my account in GBP plus a conversion fee. I just account for the GBP cost. Accountant has never raised it as an issue.

Even where I could keep a foreign balance in my Wise accounts, but never do, I withdraw to GBP and account for the figure received.

 

[MyAccountantOnline]

I'm starting to do some gig work for a company that pays out to Paypal in $US. This is converted to GBP in Paypal and withdrawn to a UK business bank account.

I trade as a Ltd co (no other employees or officers) and until now I've been filing CT return micro-entity accounts using the HMRC online system (with simultaneous filing to Companies House). Accounts are very simple, mostly just income and sundry expenses like stationery, travel and web hosting and the filing takes me little more than an hour. I work from home but I don't bother claiming for electricity, etc. So I've been keeping my transaction records and accounts in Excel spreadsheets.

I know that the online HMRC system can't be used to file where there are foreign currency transactions.

Any suggestions on the cheapest option to restructure my filing? I don't need an industrial strength Sage package or the like and I've managed until now without an accountant.

FreeAgent is worth a look especially if you bank with Natwest, Ulster Bank or Bank of Scotland as that entitles you to a free subscription.

You mention you arent claiming all costs already - you may well find an accountant will save you tax (as well as the hassle of doing your own accounts and tax returns)