Paid in Dollars, Spending in Pounds? How UK Content Creators Can Master Foreign Income and Tax

The Foreign Income Dilemma

If you're a UK content creator, freelancer or influencer getting paid in USD (or any other foreign currency), you know the dilemma:

✅ Clients pay in dollars

✅ Your bills are in pounds

✅ HMRC wants it all calculated perfectly

Confusing? It doesn’t have to be.

Let’s break down how UK tax works on foreign income, how to handle exchange rates, and what you must do to stay compliant while keeping more of your hard-earned money.

1️⃣ HMRC Sees All Foreign Income

First rule: HMRC taxes UK residents on worldwide income.

That means any USD payments for work done as a UK tax resident must be declared—even if they’re paid into a foreign account like PayPal or Wise.

✅ Don’t ignore foreign earnings.

✅ Declare them on your Self Assessment.

2️⃣ You Must Convert to GBP for Tax

HMRC requires you to report foreign income in GBP.

You can’t just list “$2,000” on your tax return.

✅ HMRC’s rule: Use the exchange rate on the date of receipt (or an approved average rate if you receive regular payments).

✅ For example, if you got $2,000 when the rate was £1 = $1.25, you’d declare £1,600.

Tip: Keep records of exchange rates used—this is essential if HMRC ever asks for proof.

3️⃣ Which Exchange Rate Should You Use?

HMRC allows:

✅ Official exchange rates from HMRC or Bank of England.

✅ Your own provider’s rate (e.g. Wise or PayPal conversion) if it reflects the true rate you received.

✅ Annual or monthly average rates for regular income (often simpler for regular creators).

Consistency is key. Pick your method and stick with it for all reporting.

4️⃣ Watch Out for Currency Conversion Fees

Many creators lose out on:

✅ Platform fees (PayPal, Stripe, Wise take a cut)

✅ Currency conversion costs

Good news: These are deductible expenses.

✅ You can claim them against your income to reduce your tax bill.

✅ Keep detailed transaction records and receipts.

5️⃣ Foreign Tax? Don’t Pay Twice

What if you paid foreign tax on your USD earnings?

✅ Check for Double Taxation Agreements (DTA) between the UK and the client’s country.

✅ Claim Foreign Tax Credit Relief on your UK return to avoid paying tax twice.

This can save significant money—don’t skip it.

6️⃣ Track Everything. Seriously.

If you’re paid in USD and spending in GBP, your record-keeping is vital.

✅ Invoice amounts in foreign currency

✅ Date received

✅ GBP equivalent using your chosen exchange rate

✅ Fees and conversion charges

Cloud accounting software or even a spreadsheet can make this easy.

7️⃣ Plan Ahead for Tax Payments

Foreign income is subject to UK Income Tax and potentially Class 2/4 National Insurance if you’re self-employed.

✅ Set aside ~20–40% of your GBP-equivalent income for tax.

✅ Don’t get caught short come January!

8️⃣ Professional Advice Pays for Itself

Let’s be real: currency, fees, exchange rates, tax returns—it’s a lot.

✅ We specialise in helping content creators untangle this mess.

✅ Get your foreign income reported right.

✅ Maximise your expenses.

✅ Avoid penalties.

At Cre8Tax, we help UK creators, influencers and freelancers take the stress out of tax—even if you’re paid from all over the world.

Final Thoughts

Ready to stop stressing about your USD income?

Contact Cre8Tax today for tailored tax advice for UK content creators.

✅ Transparent fees

✅ Personalised support

✅ Peace of mind at tax time

Email us at info@cre8tax.co.uk or call free on 0800 0016 878.