Skip to main content

This is a new service – your feedback will help us to improve it.

Posted Thu, 08 Dec 2022 21:45:20 GMT by LL123
I did some work for a customer in March 2022 and I invoiced the customer in March 2022. The invoice is in USD. The customer paid the invoice in USD on 10th April 2022. Do I account this payment in 2021/2022 tax year or 2022/2023 tax year? Also, should I use the March 2022 HMRC monthly exchange rate (UDS to Pound) or the April 2022 HMRC monthly exchange rate (USD to Pound) for this transaction? Please could you advice.
Posted Mon, 12 Dec 2022 14:06:17 GMT by HMRC Admin 17

Hi,
 
This would depend on the method of accounting used. 

If you use the 'traditional accounting' method, you would use the exchange rate at the time the income is earned, which is the arising basis. 

Alternatively, the 'cash basis' is a simplified accounting method, in which you would use the exchange rate at the time the money was received. 

You also have the choice of using the spot rate or the annual average rate. 

Each option is acceptable. 

Have a look at :

Business records if you're self-employed    . 

The official exchange rates can be found at :

Exchange rates from HMRC in CSV and XML format     .

Thank you.

You must be signed in to post in this forum.