Contractors' Questions: What if I’ve been paid in euros but want pounds?

Contractor’s Question: As a UK contractor with an England registered limited company, I’ve been paid by my new French client in euros into my UK business bank account. What’s the best way to avoid or mitigate these charges; do I just need to look for a bank that takes in euros without hefty charges? Or should I take the euros out and into the hands of conversion firm, but can the firm then move the now-sterling currency back into my UK account, without charging me? 

Expert’s Answer: In an ideal world, you should look to use an account denominated in the same currency as you are due to receive, as receiving euros into a GBP account would mean an auto-conversion on behalf of the bank and the worst possible exchange rate!

If you look to your bank to provide you the relevant currency account, it’s a solution that contractors often find prohibitive, due to both the time the bank can take to do this and the charge they apply to set it up. 

Specialist currency firms – potentially what you mean by a ‘conversion firm’ - not only tend to offer a far better exchange rate than retail banks when you come to exchanging funds, but there are also no account opening fees and transparent spreads of exchange. 

In addition, should you change contract and be paid a different denomination of currency, you can simply open a new receiving currency account quickly (and free of charge) in order to receive the funds and then control when you wish to transfer them and into which currency.

The expert was David Thomas, head of private clients at Global Reach Partners.