Guides

HMRC exchange rates: turning foreign currency income into pounds

Checked against GOV.UK on 15 October 2026

General guidance taken from GOV.UK, not advice about your own tax affairs. HMRC's rules change, so the GOV.UK pages listed at the end are the final word.

Your tax return is in pounds, so income and costs in euros, dollars or any other currency have to be converted. HMRC doesn't insist on one rate. Its own manual says traders may use:

  • London closing rates, as HMRC publishes them
  • an exchange rate quoted by their bank
  • "the monthly average rates published by HMRC for VAT purposes", as the manual puts it

HMRC says it only needs to query a rate if, exceptionally, it "diverges markedly" from rates obtained from reputable sources like these.

HMRC's monthly rates

HMRC publishes its monthly exchange rates on the Trade Tariff service:

  • They're published on the penultimate Thursday of every month.
  • They apply to the following calendar month: the rates published in late October are the rates for November.
  • They're the rates as of midday the day before publication. (HMRC's manual calls its VAT rates "monthly average rates"; the Trade Tariff page describes them this way.)
  • You can view them online, or download them as CSV or XML.

To convert an amount at HMRC's rate for a given month, use the HMRC exchange rate calculator. It covers every month since January 2022.

The same service also publishes average rates and spot rates for each year, and rates from previous years.

HMRC's manual adds that the London closing rate is not an "official" rate, and that businesses may use other exchange rates for tax purposes, as above.

Which date a conversion belongs to

For tax, a sole trader's profits follow normal accounting practice, so HMRC accepts the exchange rates used in your accounts, where they follow that practice. HMRC's manual describes the accounting rule:

  • Convert each transaction at the exchange rate on the date it's first recognised — the spot rate on that date.
  • An average rate is acceptable for a period if rates don't swing significantly within it. HMRC's example is a business making many euro purchases each month, using that month's average euro rate for all of them.

Under the cash basis — the default for sole traders — you only record income when you receive it, and expenses when you pay them, so that is when an amount is first recognised, and the date to convert it at.

Invoicing a client in euros or dollars

What counts for your profit is what you actually receive, recorded when you receive it under the cash basis, not the figure on the invoice on the day you sent it.

  • If your bank converts the payment into pounds, the rate it used is one HMRC says you may use.
  • If you keep the money in a currency account, convert it at a rate from one of the sources above, as at the date you received it.

What the invoice itself must show, a sterling figure on it, bank charges and VAT are in the guide to invoicing in a foreign currency.

Sources