I am a US-based freelancer and need to invoice a UK client in Pound Sterling for freelance work conducted in the US.

I used to live in the UK and have a UK-current account where the payment can be made into. This would make things a lot easier for everyone if possible.

Does it matter where the money is paid in as long as I pay tax on it in the US? Or would I have to have the UK client pay this money into a US-based account?

Would be great to hear from anyone who's had any experience with invoicing with a foreign currency, when freelancing from the US.

Many thanks

1 Answer 1


The important is that you declare your revenues in the country you're operating the business. And as the url below suggests, you might also need to declare this UK bank account to the IRS. So yes, you can invoice your client in Pound Sterling and have it deposit in the UK bank account. That's a good solution if you actually have a need for the Pound Sterling somehow (eg. shopping online in the UK) and don't want to pay for the exchange rate.


But if you have an account to receive online payment such as Paypal, you can simply invoice in Pound Sterling and then convert the currency to USD, and get it transferred into your US bank account. The only downside is the exchange rate that you'll need to pay (usually around 2%-2.5% + value of currency) and the currency value on Paypal is not always exactly following the market, but it's usually close enough, and worth the "trouble".

It might be an easier and safer solution than having a deposit in the UK, and there's other online payment method you can use other than Paypal (eg. Stripe, WePay.)

Your client can either use his own Paypal account, credit card and even bank transfer in some cases. From Paypal for example, your client can deposit money from their bank account to their Paypal account, and then send you a payment.

  • Thanks for your response. I've already informed the incredibly intrusive IRS about the account in the UK. If it is fine to have money paid into a UK account, I am not clear as to whether I would need to exchange the money into $ or I could just keep them in pounds. Also there are way better ways to transfer money from abroad than Paypal. Transferwise for example, has very reasonable rates.
    – JZ35
    Jun 19, 2015 at 20:12
  • If the bank account in GBP, you GBP. Then if you get it transferred to a US bank account, it might need to be converted to USD. I'm not from USA but here I need a commercial account in a specific currency to get other currency. Otherwise I need to pay the 2% exc. rate. For transfer, not sure why you want to go through a bank account, that's an extra intermediary but you can look at WePay, Payoneer, Stripe. By the way, Paypal or any other system is more expensive if paid from credit card. If money comes from Paypal to Paypal it's a lot cheaper, for example. Not Paypal fault's, same everywhere.
    – go-junta
    Jun 20, 2015 at 4:12
  • When converting currency, there is always a base fee of 2-2.5% + the value of the currency. And the fee you pay in any of these payment services for receiving money is usually influenced by: if a credit card is used and if it's international. From Paypal to Paypal, I think it's free to receive money; the sender pays the fees. You pay if paid from credit card to Paypal. I calculated Transferwise vs paypal exchange rate, only $10 difference on $1000. Plus if you have a business, check if these transaction expenses are deductible, eg. you either give that $10 to the IRS or to Paypal!
    – go-junta
    Jun 20, 2015 at 4:28
  • Thanks again, but with all due respect, I don't think you're in the best position to answer this if you are not even a US-based freelancer. I am not talking about credit card payments. A UK business/corporation is paying me for my work by bank transfer and I have the option to have it paid into a UK account and I want to know if this is possible.
    – JZ35
    Jun 20, 2015 at 11:48
  • If I am forced to transfer the Pounds to $ this would be coming from my personal UK current account and be paid into my US-based business account. This would be done using Transferwise, which is significantly cheaper than PayPal. About 0.5% of the value of the currency being exchanged and at more or less the mid-market rate. So in this case No there is not always a base fee of 2-2.5% + value of currency.
    – JZ35
    Jun 20, 2015 at 11:49

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