Shops accepting Euros

zerog

If a shop in the UK accepts euros cash for payment, how is their profit and tax worked out?

Supposing they take euro coins at a rate of €1.50 per £, ie. if they would sell something for £2 they would also accept €3. Then once a month they sell the coins to someone going to the eurozone for €1.30 per £. Then they have effectively sold their £2 item for £2.30 and the euros have nothing to do with it at all.

Will HMRC see it this way?

Gas_Powered_Toothbrush

zerog wrote: »

Will HMRC see it this way?

No chance in hell.

zerog

Gas_Powered_Toothbrush wrote: »

No chance in hell.

OK, can you be more helpful?

John_Pierpoint

http://www.hmrc.gov.uk/vat/managing/international/foreign-currency.htm#3

martinsurrey

What ever rates they use, or how they do it, at the end of the day if they report in Sterling they'll need to convert thier assets to sterling (either by actual conversion or conversion for reporting at balance sheet date) and report exchange gains and losses on that, so it all falls out in the wash.

Bottom line the same, just a different split between lines in the P&L

(VERY simplistic view, and there are ways a company can maximise things, but far too complicated or a forum).