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I've done some work via Upwork the freelance agency.

Essentially there is an outstanding "balance" (credit?) that has not been sent to my bank account yet (money to be paid to myself).


Do I need to report this as 'income' yet? I assume yes as the balance corresponds to 'invoices' that are already dated / finalized.

However the balance is in USD - so how should I calculate the GBP equivalent?

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    You're self-employed? Do you know if you're already using "cash basis" or not? gov.uk/simpler-income-tax-cash-basis – Ganesh Sittampalam Jan 21 at 17:36
  • I'd prefer not to use that, but potentially would be eligible. Yes self employed. – Chris Stryczynski Jan 21 at 18:17
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    You'd prefer not to use a cash basis? – quid Jan 21 at 18:55
  • Seems a bit less structured / organized - but that's just my assumption. None the less, if I was not to use cash basis - I'd still want to know how one should handle this particular case. – Chris Stryczynski Jan 21 at 20:04
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    In the US it would be extremely unusual for an individual to operate on an accrual basis. – quid Jan 22 at 1:11
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If its an invoice submitted but unpaid then whether the invoice is not due, due or overdue is immaterial at this point.

You would record it in accounts receivable USD as its not been paid.

The currency is USD until the time its converted, that is when you will know the Value of GBP you have. At that point either its converted and you're paid or converted and still not paid. That is when you convert it in your accounts and transfer it to the appropriate account.

But you will only do it at the time you know its been converted, not before, if they do it, great, if not you need another account for currency conversion. Im, not sure how you would work that one out or how it works in your software, but hopefully they will pay you in GBP and eliminate the headache.

In short, Follow the money, its not moved so neither do your accounts.

  • I just called into HMRC and they also stated I'd only have to report this as income once a payment comes through. I suppose this is because Upwork handles the invoices on 'behalf' – Chris Stryczynski Jan 22 at 10:53
  • @ChrisStryczynski did they understand that you would be using accrual basis? It seems odd given that there is an invoice and you are clearly owed the money in some form. – Ganesh Sittampalam Jan 22 at 19:21
  • Not sure, they didn't ask. I'll confirm tomorrow once again. – Chris Stryczynski Jan 22 at 19:30

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