Exchange rate fee in using PayPal for foreign payments
I use PayPal to pay a lot of my foreign invoices.
When I log an invoice in my accounting system I use the exchange rate as per XE. com at the invoice date to convert it into British pounds.
I then make the foreign payment through PayPal. They convert the foreign payment into British pounds using their rate.
I therefore have a difference in what I recorded the invoice for in GBP in my accounting system and what it has cost me to make that foreign payment using PayPal. At the moment I just move the difference to Forex movement on the profit and loss.
Is this the correct treatment because I know PayPal charges a 2.5% exchange conversion fee so technically not all the exchange difference is down to the exchange rate movement. Some of the movement is down to the fee PayPal charge to convert the currency.
- Accountancy Career 325 4
- Do I need to report this to SOCA 3,697 39
- Holiday Pay whilst on Mat Leave 90 1
- Accounts Software 153 5
- HMRC Agents Line 211 4
- calculation DTR restriction 89 1
- Company Director In Prison 459 11
- SMP reclaimable by employer 82 1
- AWeb - download file 178 3
- Charity work 246 11
- Help with HMRC investigation 263 6
- Director Drawings 180 5
- Subcontractor and CIS Deductions made by Contractor 272 13
- Managing Employee Expenses 237 7
- Collection or business assets 117 1
- Incorporated when they should not have 275 8
- Tax position re this lease? 372 9
- Do I need a smartphone? 732 23
- Is compensation for surrender of a lease subject to VAT 109 2
- Can I take action against my accountant for incompetence? 3,677 70
- Property exchange - 8-year legal delay following fall-out 681
- Have you staged yet for auto enrolment? 521
- Cancelled 428
- Cancelled 366
- SAGE Payroll Data for Import to MS Dynamics AX 362
- Probiz 338
- Free-standing washing machine - unfurnished lettings 329
- Phishing emails purporting to be from CIPFA? 244
- Is this UK incapacity benefit taxable in UK or Jersey? 218
- Another HMRC computer glitch? 203