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HMRC internal manual

Employment Income Manual

Earnings paid in foreign currency

General earnings taxable when receivedGeneral earnings that are taxable when received by virtue of the charging provisions in Sections 15 or 27 ITEPA (or Sections 21 and 25 before 6 April 2008) will be chargeable whether paid or payable in foreign currency. It is simply necessary to quantify the amount chargeable in pounds sterling.

The amount chargeable is strictly the sterling equivalent at the date the employee becomes entitled to be paid the earnings or, if earlier, the date they are paid. This can be calculated using the relevant exchange rates in operation at the time.

No deduction can be given for costs of converting currency or for losses incurred on the exchange.

General earnings taxable when remitted to the United KingdomFor earnings that are taxable when remitted to the United Kingdom the conversion should be made at the date they were remitted. (See

EIM40301for the meaning of “remitted to the United Kingdom”.)