The euro is the European single currency of the twelve euro area countries that have chosen to join. This does not include the UK.
The twelve euro area countries are:
On 1 January 2002, euro cash was introduced in those twelve countries. By 28 February 2002 at the latest their respective national currencies will have been withdrawn from circulation and will have ceased to be legal tender.
Individuals and businesses in the UK who have links with the 12 euro area countries must expect to find all financial transactions being carried out in euro only from 1 January 2002.
This guidance provides information on the main tax implications for dealing in euro instead of the old national currencies.
You can pay any tax or National Insurance liability in euro and we will convert the payments into sterling.
You can pay by:
You can find further details about euro payment procedures in the area specific guides within the Paying HMRC section of this website.
We will not pass on to you any of our administrative costs for converting euro into sterling unless it is a euro payment drawn on an overseas bank account. However, we will not meet the risk of any currency value fluctuations.
The rate of exchange between sterling and the euro can vary, as with any other currency. The exchange rate used is the one in force when the clearing bank presents your payment. If the rate used for converting euro into sterling leaves a shortfall, you may have to pay the difference. If you overpay, any repayment arising will be made to you in sterling.
Although you cannot totally eliminate the risk of shortfall or overpayment, you can minimise it by using Bacs Direct Credit, Internet, telephone banking or CHAPS rather than cheque. These methods reduce the time it takes for the payment to be cleared through the banking system.
No. All entries on UK Tax Returns must be completed in sterling. If you receive taxable income in euro, or any other currency, it must be converted into sterling.
A UK business can prepare most of its tax computation in euros, but it will have to convert the final figures into sterling to complete its Tax Return. The exception is the capital gains computation that has to be calculated in sterling.
The exchange rates can vary on a daily basis. The Bank of England issues the current exchange rates, and you should use that source for the latest information.
The link below will provide average exchange rates for both the calendar and financial years, as well as spot rates for 31 March and 31 December. Select the option ‘Exchange rates’ and enter the country as ‘European Union’. This information may help you convert euro to sterling for the purposes of completing your tax return or business accounts. It does not however provide any other daily exchange rates.
Exchange rates for earlier periods
Under current law there are sometimes tax consequences if share capital, assets or contracts are converted from one currency to another. You will not usually have to pay more tax as a result of conversion as long as the original currency is of a country from the euro area.
For all general euro enquiries and requests for the latest leaflets, reports and information:
For tax and National Insurance enquiries:
or write to:
HMRC Euro Preparations
DMB Banking
Ninth floor, South spur
Euston Tower
286 Euston Road
London
NW1 3UQ
For value added tax (VAT) enquiries:
