Karolina Kroliczek

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