Paypal conversion differences as expenses

Hello, My earnings go into Paypal as USD (self-employed, I do my own self-assessments, etc), and when I transfer that amount to my bank, it is automatically converted into sterling by Paypal, using their own rates. Paypal's rates are not as generous as HMRC's rates, and so I lose a small portion of money each month. I am unable to use any other option for my money than Paypal, but if I could, I would. Is this difference between the figure I report to the HMRC using their own rates and the converted amount that Paypal gives me an expense? I have seen differing opinions on this matter, and would like to know if it classes as an acceptable expense or not. If this is allowed, then finding out what rate Paypal used is easy, and also published as a PDF per transaction (so I can save it for future records): when Paypal sends the money to my bank, the conversion rate they used to convert the figure is listed in the transaction, so I know exactly what conversion rate they used at the exact moment they transferred the money. I would then use that figure to convert the full USD figure. If this expense is allowed, this is how I would calculate my future earnings: (Full USD figure converted with HMRC rates) - (the same USD figure but converted using the rate Paypal used) = difference. The full USD HMRC converted figure would be reported as my gross income, and the difference would be included as an expense. Currently, I report the full USD amount I receive in Paypal as a converted figure using HMRC's published rates. If you require further information before you can answer, please let me know.

Hi

No.  You cannot claim for this.  
You should be converting the USDs that you are paid by your client to GBP, using a just and reasonal exchange rate, such as the rates provided by HMRC or from another source and not using the GBP figure converted by PayPal.
The cost you incur converting to GBP is not a gain or a loss and cannot be claimed for.

Thank you

That is what I suspected. I will continue to convert the USD amount I receive using HMRC's provided rates, as I have always done. Thank you for your reply.

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