Self Assessment - International Invoices EUR/GBP Bookkeeping question

Hi HMRC I'm preparing for my following self-assessment, and I have a couple of questions related to bookkeeping and the invoices in EUR. To give you a brief example of what I'm struggling with. In May 2021, I invoiced the client for the first time in EUR, which was 16,032 EUR (invoice date 07/05). The client paid 16,032 EUR to my account on 03/06 and I still had to pay the contractors based abroad, which I did later in June 2021 (the same month) Initially, I used the HMRC online exchange rate (EUR/GBP) calculator for May 2021 to calculate the total amount in GPB. Step by step - I've deducted the amount paid to the contractors (even though I paid them in June) and still used May's exchange rate (even though I got paid the whole amount by the client at the beginning of June). That left me with 2,670 EUR -> 2,306.22 GBP (all based on May's HMRC online rates) As follows: 16,032 EUR - minus amount paid to contractors = 2,670 EUR -> 2,306.22 GBP (May's HMRC Online Exchange Rate) But the main question is - out of these 16.032 EUR that I've received, I paid some amount to the contractors in June 2021. My fundamental question is - should I deduct the amount I paid to contractors in May 2021 (07/05, with invoicing date, as above) and use May's HMRC conversion rate to calculate how much I have left. OR Or should I deduct the amount I paid to contractors out of the total sum in June 2021 (the client's payment date on my bank account and I paid to contractors in June) and later convert EUR to GBP with June's HMRC exchange rate? Usually, I book my standard invoices in GBP with the date of the invoice. Could you advise please

Hi Karolina Kroliczek,

We are unable to provide financial advice.  

There is a choice of monthly rate, Annual average rate and spot rate.

 You are free to use any of these methods to convert to pounds sterling.
 
The offical rated can be found at:

Exchange rates from HMRC in CSV and XML format

Thank you.