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Micro entity accounts, HMRC, Foreign Currency

Is there a lack of clarity on when you can submit via HMRC website?

Didn't find your answer?

I would really appreciate any thoughts on this.

As a background I have a very simple company but the lumpy income is normally in €. Income is invoiced in € and is translated into £ at the invoice date by my accounting package. Any x-rate difference from between when invoice is paid and any difference on the € bank at the year end, is taken to a P&L currency gain/loss account. I believe this is all in line with FRS105.

If I go to the HMRC website to submit my CT600 it says you can't if you need to report "foreign currency transactions - where you are paid or pay someone in a currency other than pounds". On the face if it I clearly don't qualify so have purchased some 3rd party submission package.

However in the the submission package, for micro-entity accounts, there is nowhere in the predetermined expense categories to report any foreign currency transactions. So maybe the forex gain/loss is to be reported via "Other administration costs"? Having said that forex gains /losses are not, in my book, administration costs. In which case why do HMRC say you can't submit via their online service?

Anyway, this has me wondering, is it semantics? Maybe the word 'report' means you have to provide some additional detail, not that you just 'have' foreign currency transactions. It just seems a weird waste of time otherwise.  Am I grasping in the dark that if you account for foreign currency transactions according to FRS105 then there is nothing to report, ie. it is only if you have some abnormal accounting policy that you shouldn't use the online service? If this is correct HMRC would do well to clarify the criteria.

If I am not correct then where would you book the foreign currecny losses/ gains in micro-entity accounts and why do HMRC want you to not submit via their online service?


Replies (4)

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By Tim Vane
13th Jan 2020 19:23

My thoughts are that this would be an excellent question to ask your accountant if you had one.

You’ll probably suggest you don’t need one.

And yet here you are.

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Replying to Tim Vane:
By ukproptoppy
14th Jan 2020 08:16

Thank you for your exceptionally constructive thoughts.

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By Matrix
13th Jan 2020 20:49

I don’t know much about the HMRC online service since it is for unrepresented taxpayers. Most make a complete hash of it since it is not clear that you prepare the accounts before you start using the service and the users don’t know how to do this. But HMRC and Companies House don’t seem to mind.

I can’t see where you would report these exchange differences if they form part of your trading profits so I would agree with your penultimate paragraph.

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By Synenergia
01st Apr 2020 08:59

I think you might ask for a help from a broker or from a trader, they will provide you a better information about that. At least you have to try it, because they have helped me with a question like yours. I would never find a better answer then their one. So to say, I think you have to ask them for help, and I would definitely recommend you to ask for help from This one is the best trading platform I have ever used, it has a lot various assets where you can try to trade. Also you will find there the best brokers and traders that will find the perfect answer for you. I think you will find a solution for your problem, but you have to ask them for help.

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