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PAYMENT IN FOREIGN CURRENCY

With the development of the international marketplace and the growth in international travel you may well find yourself being asked to accept foreign currency. There are a number of different ways that you can consider facilitating this.

EUROS

Regular payments
If you have a number of customers from Europe then the easiest method is to set up a euro bank account, which will allow customers to make deposits directly into your account. Any cash payment made in euros can be directly paid into this account additionally a euro cheque book will be issued by your bank and this will simplify the payment of any refunds or invoices received in euros.

Cheque
Remember a euro cheque drawn on a euro account at a UK bank may clear as quickly as an ordinary cheque but cheques drawn on banks in other euro countries will be returned to the issuing bank for clearing. This may take four weeks.
Talk to your bank about the costs of setting up and maintaining a euro account and the charges that apply

Credit Cards
If a customer from the euro area pays by a credit card in the UK, the transaction is in £. and the amount will be credited to your business account in the normal way. The credit card company will later convert the £ amount to euros, or any other currency, at the exchange rate which applies at the time of the conversion and then debit the customer’s credit card for the relevant amount plus any charges.
Talk to your credit card company about accepting credit card deposits when the customer is out of the UK.

Euro Notes and Coins
If you are not used to these, check out how they look and their security features on www.euro.ecb.int . Remember each of the 12 participating countries produce their own euro coins which differ; these can be seen on: www.ecb.europa.eu/euro/html/index.en.html


Euro Transaction Records – VAT/Inland Revenue
If you issue an invoice in euro for a supply made in Wales, and you are registered for VAT you will have to show:

the amount of any VAT charged and
the total amount in £.


Tax returns must be completed in £, so all income received in euros must be converted back to £’s. The Inland Revenue will accept payment of tax and NI in euros at no extra charge but be aware they will not accept any currency rate changes and will charge you for these.

Other Currency Payments
You are free to accept cash payments in euros, or any other foreign currency such as dollars and these you can pay into your bank but there will be an exchange cost from the bank for each transaction.

If you want to download this answer please click on one of the links below:

payment in foreign currency (Word Document 131 Kb)
payment in foreign currency (PDF Document 138Kb)

 

Accepting Credit Cards

Foreign Currency Converter


It is possible for you to accept payment in foreign currency for goods and services.

Talk to your bank or your accountant about the kind of system that would suit you best.

There are specific rules that apply for VAT registered customers

 

Exchange Rates
Remember the bank will convert euro to £’s using the exchange rate at the time the money reached your account.

 

 

 


Online Payment
Check out www.paypal.com or www.worldpay.com, which are different ways of accepting payment online