Self-employment tax return with income in foreign currency

Sumarokov

I am filing my UK tax return as a self-employed individual (translator). My one source of income was a payment for a piece of translation work I did, which I received in Euros in my Euros bank account. I calculated the sum in sterling according to the exchange rate at the time, rounded the figure down to the nearest pound and declared it as my "turnover".

However, there is nowhere in the tax return to indicate this actual fact that it originated in Euros; just the resulting figure in sterling, along with my declaration that I use the cash basis for accounting.

Should I provide a little story in the "additional information" section at the end (maximum 700 characters allowed), stating what the figure was in Euros and how I calculated it? Or is this just complicating things?

[Deleted User]

It is just complicating things. In the unlikely event that your return is selected for review, you have the methodology behind your calculation which is not unreasonable.

I am always against providing unnecessary explanations - why give HMRC reason to look at the return more closely?

Speedbird676

I wouldn't provide an explanation as long as you have the relevant evidence backing up your calculation in the unlikely event you're picked for a review.

If the money remained in your Euros bank account, ie: there was no real-world exchange rate, then you should use the HMRC exchange rates. Either the monthly exchange rates (https://www.gov.uk/government/publications/hmrc-exchange-rates-for-2021-monthly) if you know exactly when the money was received or the annual average rate (https://www.gov.uk/government/publications/exchange-rates-for-customs-and-vat-yearly) for multiple transactions over a tax year.