Invoicing in Euros
Discussion
There is no problem in raising an invoice in Euros and sending the Euro copy to your Dutch customer.
Obviously, you will need to enter the invoice into your accounting system in Sterling. The normal method is to use the conversion rate at the date of the issue of the invoice. It might also be worthwhile printing off an actual "Sterling" version of the invoice for your own internal records and filing it, along with your copy of the Euro invoice, in your Sales Invoice File (if you have one).
When your Dutch customer pays you in Euros, you will probably realise that the amount paid to you, when converted into Sterling, will be different to the Sterling value already entered in your Sales Records. The difference will be due to the currency fluctuations between the date of issue of the invoivce and the date of payment by the customer - and taking into account any bank handling charges. The difference between the two Sterling values is the "Loss or Gain on Exchange" and is written off to the Profit and Loss account.
Regarding VAT, if your customer is VAT registered in Holland and has a valid Dutch VAT number, you should be able to Zero rate your sales invoice (it doesn't matter whether it is in Euros or Sterling). You must quote your Dutch customer's VAT number on YOUR original and copy invoices. HM Revenue and Customs can let you know if the number given to you by your Dutch customer is valid or not.
Obviously, you will need to enter the invoice into your accounting system in Sterling. The normal method is to use the conversion rate at the date of the issue of the invoice. It might also be worthwhile printing off an actual "Sterling" version of the invoice for your own internal records and filing it, along with your copy of the Euro invoice, in your Sales Invoice File (if you have one).
When your Dutch customer pays you in Euros, you will probably realise that the amount paid to you, when converted into Sterling, will be different to the Sterling value already entered in your Sales Records. The difference will be due to the currency fluctuations between the date of issue of the invoivce and the date of payment by the customer - and taking into account any bank handling charges. The difference between the two Sterling values is the "Loss or Gain on Exchange" and is written off to the Profit and Loss account.
Regarding VAT, if your customer is VAT registered in Holland and has a valid Dutch VAT number, you should be able to Zero rate your sales invoice (it doesn't matter whether it is in Euros or Sterling). You must quote your Dutch customer's VAT number on YOUR original and copy invoices. HM Revenue and Customs can let you know if the number given to you by your Dutch customer is valid or not.
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