Working with clients abroad can open up better-paying work, but invoicing them is a little different. This guide covers the practical side. It is general information, and tax treatment depends on your situation, so check GOV.UK or ask an accountant.
1. Agree the currency in advance
Decide whether you will invoice in pounds or in the client’s currency, and put it in your quote or contract. Invoicing in the client’s currency is friendlier but exposes you to exchange-rate changes. Invoicing in pounds moves that risk to the client.
2. State the exchange-rate approach
If the invoice is in a foreign currency, say which rate you use and when, for example the rate on the invoice date from a named source. Your accounting software should record the equivalent amount in pounds on the same basis.
3. Put international payment details on the invoice
- Your IBAN and BIC or SWIFT code, as well as the account name and bank.
- The currency the invoice is payable in.
- Who pays transfer fees. Ask for the full invoice amount to arrive, so you are not short.
4. Think about tax and VAT
The VAT position for an overseas client depends on where they are, whether they are a business or a consumer, and whether you supply goods or services. Many services to business customers abroad are outside the scope of UK VAT, but the rules vary, and some require specific wording on the invoice. Always check before you issue the first invoice.
5. Set clear payment terms
International payments take longer. Allow extra days, ask for a deposit on large jobs, and agree what happens if payment is late. The statutory late-payment interest rules apply to UK contracts, so for overseas clients include your own terms in the contract.
6. Record gains and losses
If the exchange rate moves between the invoice and the payment, you make a gain or loss. See foreign currency gains and losses explained.
7. Report income in pounds
HMRC expects your income to be reported in sterling, using a reasonable and consistent exchange rate. Keep a note of the method you use.
A short checklist
- Currency and rate agreed in the contract.
- IBAN, BIC and fee wording on the invoice.
- VAT treatment checked.
- Payment terms and any deposit set.
- Gains and losses recorded when paid.
How AvrioBooks helps
Invoice in other currencies with daily exchange rates, revalue open balances and see your exposure. Multicurrency is available on the Standard plan and above. See multicurrency accounting software and the complete invoicing guide.
Frequently asked questions
Should I invoice in pounds or the client's currency?
Invoicing in pounds moves exchange-rate risk to the client. Invoicing in their currency is friendlier but means you carry the risk. Agree it in the contract.
What bank details do I need on an international invoice?
Your IBAN and BIC or SWIFT code, the account name, the bank and the currency of payment.
Do I charge UK VAT to overseas clients?
It depends on where the client is, whether they are a business or a consumer and what you supply. Many services to overseas businesses are outside the scope of UK VAT, but check before you invoice.
Which AvrioBooks plan handles foreign currencies?
The Standard plan and above.
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