Self Employed Tax Help Needed - paid in USD

SkippingOctopus

Hi,
I've been self employed for 2 years and this is the first time I've encountered this issue. I have started doing tome work for a firm based in the USA who would charge me and arm and a leg t pay me by wire transfer, so instead pay me on to a prepaid Mastercard. They pay me in USD and I withdraw from a cash point in GBP

So Im ready t do last years tax return and Im not sure how to record the USD? Should I record the amount in GBP that I have withdrawn as my earnings? Or should I use xe.com to convert the amount that I was paid in USD at the time of payment?

I dont really want to pay tax on money I havn't received, even if its only a few £ out, it all adds up!

Thanks in advance, ps sorry if its the wrong section to post in!

Cheeky_Monkey

The best people to ask would be HMRC

agrinnall

I'm reasonably sure that they will want you to account for money at the time it is paid to you (in this case, when it's loaded onto the Mastercard). And I would expect that you'd need to use HMRC's exchange rates:

https://www.gov.uk/government/publications/hmrc-exchange-rates-for-2017-monthly

bap98189

You should account for the money at the time you were paid. Any charges you experience converting the money, or any variations in exchange rate you class as costs and will reduce your tax liability accordingly. If you are unsure about how to deal with this, then I suggest you need to employ an accountant to do this for you.

SkippingOctopus

Thank you, this helps a lot, I have spoken to other people who advised me not to declare it at all!

Im currently working part time so an accountants fees would be really noticed coming out of my wages, but hoping to be able to step it up a bit soon so have actually started enquiring around, I just want to try a few months working more hours to ensure that it actually does bring in more money!

agrinnall

SkippingOctopus wrote: »

Thank you, this helps a lot, I have spoken to other people who advised me not to declare it at all!

Don't listen to other people! Not only should you declare it in the UK unless you want to face charges for tax evasion, it's possible that you may also need to declare it to the IRS in the USA.