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• # 73107
• Wed 20 Jul 2011 09:02 PM

Hello all,

A new client invoices UK registered companies in EUR.  VAT is also charged to these customers in EUR.  The invoices are paid in EUR into my clients EUR account.  However, when the VAT is paid to HMRC it is paid in GBP.  Do we use the invoice date or payment date to calculate the correct GBP value and from where do we get the exchange rate?

All advice will be greatly appreciated.

Kind regards,

Kelly 

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• # 73111
• Thu 21 Jul 2011 07:41 AM

Hi Kelly,

This is something you could ask the HMRC about. If you are on the standard VAT scheme it might be better to use the exchage rate on the invoice date.

But if you are on the cash accounting scheme then it might make more sense to use the exchange rate on payment date.

Either way, I don't think the exchange rate will vary massively, but check with HMRC as to which date they prefer.

You can get historical exchange rates from www.xe.com.

Hope that helps


Edited at 21 Jul 2011 07:42 AM GMT

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• # 73114
• Thu 21 Jul 2011 08:20 AM

Hello Kelly,  I have a client in a similar position and the exchange rate I use for transactions is the one listed on the HMRC website which you can find at

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageImport_RatesCodesTools

I use this for invoices and deposit, and I use the rate quoted by the bank for a specific transaction, such as when transferring from the Euro into the Sterling account for example.

Hope this helps,


Edited at 21 Jul 2011 08:22 AM GMT

• Neil
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• # 73119
• Thu 21 Jul 2011 04:36 PM

Hi Kelly

HMRC guidance on the different methods allowed here:

http://tinyurl.com/3bbetba

For daily rates I use oanda.  Personally I think this method is more accurate.  At the same time it is more cumbersome if you are using Sage multicurrency and have to enter the rate for every transaction on a different day.

I think I read that you have to stay with the method you choose - you can't change it when it suits you.  I'm open to clarification on this from other readers.

Regards

Andrew

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• # 73156
• Sun 24 Jul 2011 10:55 AM

Hello all,

Thank you for all of your advice.  I have used your links and gained total understanding of what I need to do!

Thanks again,

Kelly  

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