|
|
Earning a Living
Topic has 6 replies.
  
|
|
Sort Posts:
|
|
|
|
 11/03/2008, 14:42
|
Hilly
Joined on 21/02/2006
Posts 9
|
Bookkeeping - euros and sterling
|
|
|
|
|
I've just started a Micro Enterprise and as I am trading in both France and England, receive and make payments in both sterling and euros.
Can anyone suggest the best way to enter the different currencies into my books? Do I show both currencies separately, convert them now, or at the end of the month or year?
Also, I presume all figures will have to be in euros for the end of year accounting.
Any advise gratefully received!
|
|
|
|
|
Report
|
|
|
|
|
11/03/2008, 14:50
|
Tony F Dordogne
 
Joined on 10/04/2005
Small village in the Dordogne, near St Cyprien
Posts 1,409
|
Re: Bookkeeping - euros and sterling
|
|
|
|
|
|
Genuine question - can you use a French micro to put through UK income if you're trading there - I would have thought that the income from the UK was returnable there unless there is some whizzo double tax loophole which allows you to do so.
Tony F
Dordogne (24)
Huguenot Trails
|
|
|
|
|
Report
|
|
|
|
|
11/03/2008, 15:34
|
Hagar
Joined on 28/10/2004
Posts 252
|
Re: Bookkeeping - euros and sterling
|
|
|
|
|
|
|
I don't run a Micro but I am pretty sure you must keep your books in Euros - assuming that you convert Sterling income to Euros shortly after receiving it then simply enter the sterling amounts in euros using the conversion rate that you get at the time (or something close to it).
If you keep the amounts in Sterling at year end ( i.e you have separate sterling accounts at the bank) then the proper way to do it to set a "budget" exchange rate at the start of the year. Invoiced amounts (and bills recieved) in Sterling are entered into your books as euros using your budget rate. When you actually transfer Sterling into your euro account you will get the appropriate bank rate. This will no doubt be different from your budget rate. If the rate is Sterling/Euro rate is lower than your budget rate then you make an additional entry in your books as a currency gain. if higher then an entry as a currency loss. Same idea at year end - you value the Sterling in your account at your budget rate and then compare that to the actual rate you would get on that day. Normal accounting prudence would dictate that you don't eneter any potential currency gain but should enter any potential losses on currency as a provision.
Hope that makes sense.
hagar
|
|
|
|
|
Report
|
|
|
|
|
11/03/2008, 15:40
|
tj
Joined on 23/08/2004
Charente Maritime
Posts 358
|
Re: Bookkeeping - euros and sterling
|
|
|
|
|
|
|
Hi
Your obviously resident here so convert the sterling to euros and enter into your day book, I presently convert income from UK at EURO 1.30 - 1 GBP. When you submit your tax return just enter the whole amount in Euros, theres no point in confusing the situation at the french tax office, since under the micro enterprise scheme they are only interested in the total amount of revenue not where it came from.
www.renovatingfrance.com
Life is what "you" make it, don't let "it" make you!
|
|
|
|
|
Report
|
|
|
|
|
20/03/2008, 10:18
|
Hilly
Joined on 21/02/2006
Posts 9
|
Re: Bookkeeping - euros and sterling
|
|
|
|
|
|
Thank you all for your replies - extremely helpful and solved my problem!!
Hilly
|
|
|
|
|
Report
|
|
|
|
|
20/03/2008, 10:31
|
Panda
Joined on 29/01/2008
Charente (16) and Vienne (86)
Posts 238
|
Re: Bookkeeping - euros and sterling
|
|
|
|
|
|
|
Hi
I'm with TJ I do exactly this and have had no problem. I raise my invoices showing both currencies and enter a single figure in my tax return. The only problem for me is the diminishing return for my efforts as current rates!
In answer to Tony, the currency is not important, where you are when you do the work is. If for example you supply a service from the UK to a french company they will want you to invoice in euros, that doesn't obvously mean you have to make a french tax return, the same applies to this, in reverse.
Panda
|
|
|
|
|
Report
|
|
|
|
|
05/05/2008, 14:56
|
Hagar
Joined on 28/10/2004
Posts 252
|
Re: Bookkeeping - euros and sterling
|
|
|
|
|
|
 tj wrote: | |
Hi
Your obviously resident here so convert the sterling to euros and enter into your day book, I presently convert income from UK at EURO 1.30 - 1 GBP. When you submit your tax return just enter the whole amount in Euros, theres no point in confusing the situation at the french tax office, since under the micro enterprise scheme they are only interested in the total amount of revenue not where it came from.
|
|
I would be a bit careful with that. You cannot just select a rate that suits you without making some adjustment for currency gains/losses. If you do then you are in danger of over/under stating your true revenue.
Example - you decide to use a rate of 1:1 - the actual rate you get is 1.3:1 - in this case you are underdeclaring your sterling income by some 30%.
I know that is an extreme example and I am aware that the OP talks about a micro and the amounts involved may be relatively small but should you be subject to a"controle" by the "fisc" it might be something they would question. (Think about the money-laundering regs)
rgds
Hagar
|
|
|
|
|
Report
|
|
|
|
|
France Forum » Living » Earning a Livin... » Bookkeeping - euros and sterling
|
|
|
|