Best way to send money abroad for business.

Mishomeister

So the situation.

I am buying something for my business from abroad.

The person I am buying from abroad is a Sole Trader lets say Mr John Smith trading for example as ABC Holdings.

He runs his business finance from his personal bank account.

The invoices will be in his Trading name.

Which platform am I best using (Eg. Azimo, Western Union, Moiney Gram,  normal SWIFT bank payment) where the transaction on my bank account would show as being paid either (Ideally) to ABC Holding or at least to say Azimo etc?

I want to avoid any potential questions from HMRC should they needed to audit my business and having to evidence to them that payment to MR John Smith is the same one I have the invoice for ABC Holdings.

Thanks a lot

greyteam1959

Sounds to me like you could be walking straight into a scam.

oldbikebloke

the payment mechanism has little bearing on what audit trail you have for the transaction since, at the end of the day, all you are doing is sending a payment to an account number. Either the invoice states the payment details, or if it doesn't, you have some documentation that does tie in John Smith to ABC at a/c # xyz. 

For HMRC to challenge the validity of the transaction they will need to show it is not a valid business cost. Linking payment to invoice is, as you say, the required audit trail for that proof.

your bank will have international payment processes that meet audit requirements.
Or are you looking for cheaper alternatives?

J_B

We have used Currency Fair to transfer money (some private, some business) to Euroland for several years now - there is a digital record of every transaction that we have ever made through them going back to 2011

Mistral001

As Oldbikebloke says ask you own bank.  They will be dealing if international transactions on a regular basis.   In the UK a sole trader must have their own name on invoices even if the business has a trading name.  I am not sure if this is a requirement in other countries, but to give you comfort you could ask that "John Smith" is put on the invoice.

noitsnotme

Don’t use your bank it will be far more expensive in most cases due to their poor exchange rates and higher fees.  Use one of well established FX companies.  I use World First but have also used Currencies Direct in the past, both have always provided an excellent service.

Any decent FX company will give you documentation showing the foreign currency payment being sent to your supplier and the sterling equivalent required from your bank to the FX company.  With a bank statement confirming the sterling amount transferred to the FX company and an invoice from your supplier, there’s your audit trail if ever required.

Mishomeister

Thank you everyone for the input so far. Those of you that have used the FX companies, what is showing in the descrioption of the payment for the company that you have used?
I mean is the payment showing as having gone to say John Smith or is it showing that it has gone to the FX company?

oldbikebloke

Mishomeister said:

I mean is the payment showing as having gone to say John Smith or is it showing that it has gone to the FX company?

the payment is to the FX company - the end payee is not something your bank knows even exists, as that is what the middleman does for you, it is the FX company who pays your supplier and their documentation is the one that names them.

noitsnotme

Mishomeister said:

Thank you everyone for the input so far. Those of you that have used the FX companies, what is showing in the descrioption of the payment for the company that you have used?
I mean is the payment showing as having gone to say John Smith or is it showing that it has gone to the FX company?

Your bank statement will show the sterling payment to the FX company and the documentation from the FX company will show the onward foreign currency payment going to your supplier.  That is a perfectly acceptable audit trail that should raise no questions with HMRC.

J_B

noitsnotme said:

Your bank statement will show the sterling payment to the FX company and the documentation from the FX company will show the onward foreign currency payment going to your supplier.  That is a perfectly acceptable audit trail that should raise no questions with HMRC.

Same here