Are Google Sheets historical exchange rates acceptable for HMRC purposes?
In Google Sheets, you can easily retrieve historical exchange rates using a formula like this:
=index(GoogleFinance("CURRENCY:USDGBP", "price", DATE(2023, 5, 3)), 2, 2)
For my PLC, a significant portion of our expenses is in USD, and as I prepare to file, I’m calculating all the necessary exchange rates. While I know the UK government provides an official exchange rate for each date, the manual retrieval process would be quite cumbersome. Instead, can I rely on this formula? I couldn’t find any specific information on this topic online.
One Comment
Using Google Sheets to pull historical exchange rates can be a convenient way to automate your financial reporting, especially when you have a substantial amount of data to process. However, when it comes to compliance with HMRC (Her Majesty’s Revenue and Customs) regulations, there are a few important considerations to keep in mind:
Accuracy and Validity: While Google Finance can provide reasonably accurate exchange rates, HMRC requires that the rates be from a reliable source and that they are the appropriate rates for tax purposes. Historically, HMRC has set out specific guidance on acceptable sources for exchange rates.
Official Exchange Rates: HMRC recommends using an official exchange rate, such as the rates published by the Bank of England. While Google Sheets can be convenient, if HMRC audits your accounts, they may request proof of the exchange rates you used. If the rates from Google Finance differ from the official rates, you may face issues.
Documentation: If you decide to use Google Sheets’ exchange rates, make sure you keep a record of how you obtained these rates, including the date and time of the query, to support your claims in case of an audit.
Consistency: If you go with the Google Sheets method, ensure that you consistently use the same source for all your historical exchange rates to maintain accuracy in your financial reporting.
Manual Cross-Verification: It might be prudent to occasionally cross-verify a sample of the rates you obtain against HMRC’s official rates to ensure there aren’t significant discrepancies.
In summary, while using Google Sheets for historical exchange rates can save you time, I recommend confirming with HMRC’s guidelines or consulting with a tax professional to ensure compliance. If they’re okay with alternative sources, then you can proceed, but always have a backup plan just in case.