HMRC publishes three sets of exchange rates. Monthly rates apply for a whole calendar month and are used for customs and, by choice, for VAT. For October 2026 they are $1.3456 and €1.1665 to the pound. Average rates cover the 12 months to 31 December and to 31 March. The year to 31 March 2026 averaged $1.3378 and €1.1574. Spot rates are taken on those same two dates. All three are published on the UK Trade Tariff service. Below are the 2026 figures for the main currencies and an explanation of when each rate can be used.
The three types of HMRC exchange rate
- Monthly rates. HMRC publishes these on the penultimate Thursday of each month, and they apply to the following calendar month. They reflect market rates at midday on the day before publication and cover around 160 countries and territories;
- Average rates. Published on 31 March and 31 December each year. Each one is the mean of all the monthly rates in force during the preceding 12 months, so the March file covers the financial year and the December file the calendar year;
- Spot rates. Also published on 31 March and 31 December, showing the rate at midday on that day. The spot file is short, covering 11 major currencies.
Every rate is expressed as currency units per £1. To convert a foreign amount into sterling, divide it by the rate. The average files also show the reverse figure, the sterling value of one unit of the currency.
HMRC monthly exchange rates for 2026: US dollar and euro
| Month | USD per £1 | EUR per £1 |
|---|---|---|
| January 2026 | 1.3329 | 1.1382 |
| February 2026 | 1.3410 | 1.1448 |
| March 2026 | 1.3573 | 1.1469 |
| April 2026 | 1.3361 | 1.1570 |
| May 2026 | 1.3502 | 1.1506 |
| June 2026 | 1.3399 | 1.1550 |
| July 2026 | 1.3404 | 1.1564 |
| August 2026 | 1.3367 | 1.1719 |
| September 2026 | 1.3554 | 1.1681 |
| October 2026 | 1.3456 | 1.1665 |
Other October 2026 monthly rates include Australian dollar 1.8868, Canadian dollar 1.8758, Swiss franc 1.1020, Japanese yen 208.5932, Indian rupee 129.0581 and Chinese yuan 9.0274. The rate for November 2026 will be published in October.
HMRC average and spot exchange rates
| Rate | USD per £1 | EUR per £1 |
|---|---|---|
| Average, year to 31 December 2025 | 1.3156 | 1.1717 |
| Average, year to 31 March 2026 | 1.3378 | 1.1574 |
| Spot, 31 December 2025 | 1.3454 | 1.1453 |
| Spot, 31 March 2026 | 1.3232 | 1.1517 |
The next average and spot rates are due on 31 December 2026. Until then, the March 2026 files are the latest available.
When you can use each rate
VAT. Paragraph 11 of Schedule 6 to the VAT Act 1994 requires any foreign currency amount to be converted into sterling. The default is the UK market selling rate at the time of supply. Instead, you can opt to use the period rate published by HMRC for customs purposes, either for all your supplies or for one class of supply. You do not have to tell HMRC in advance, but if you opt for only one class of supply you should note the details in your records. Once you have opted, you need HMRC's agreement to change. A different commercial rate needs written approval, and forward rates are never accepted. Whichever rate you use, it is the one current at the time of supply. If UK VAT is charged, the invoice must show the net value and the VAT in sterling, even if the rest of the invoice is in another currency.
Customs. For import declarations, the customs value is converted using the HMRC rates in force when the declaration is accepted, unless the conditions for using a fixed contract rate are met. The monthly rates were designed for this purpose.
Business accounts and trading profits. HMRC's Business Income Manual (BIM39515) confirms that exchange rates used in accounts prepared under generally accepted accounting practice are also acceptable for tax. Traders may use a bank's rate or HMRC's monthly rates, and an average rate is acceptable under FRS 102 when rates do not fluctuate significantly. HMRC says it will only query a rate that "diverges markedly" from reputable sources.
Capital gains. The acquisition cost and disposal proceeds are each converted at the exchange rate on the date of the transaction. HMRC's Capital Gains Manual (CG78310) says it "does not prescribe what reference point should be used", so an HMRC rate, a bank rate or a published market rate can all be defended if applied consistently.
Worked examples
A VAT-registered UK consultancy that has opted for HMRC period rates invoices a US client $12,000 for services supplied on 14 October 2026. Using the October rate of 1.3456, the sterling value is £8,917.95. If UK VAT applied, that sterling figure and the VAT on it would have to appear on the invoice. If the client pays in November when the dollar has moved, the VAT value stays the same. Any difference is a commercial exchange gain or loss, which goes through the accounts and not the VAT return.
A sole trader whose accounts run to 31 March converts $50,000 of US sales, spread evenly through the year, using the HMRC average for the year to 31 March 2026 (1.3378). The result is about £37,375. That approach is consistent with GAAP only if the dollar did not swing sharply during the year. The 2026 monthly figures above moved within a narrow band, so an average is reasonable here. In a volatile year, monthly rates would be the safer choice.
Practical points
- Check for in-month amendments. HMRC's VAT guidance warns that you should check whether a period rate has been adjusted during the month;
- Be consistent. Switching between rates to get the best answer on each transaction invites challenge. Choose a method, document it and apply it;
- Keep the source. Save the CSV for each month you rely on, because it is the evidence if HMRC later queries a figure;
- Use the right file. The average files give rates per £1 and the sterling value per unit. Read the correct column before you divide.
Sources: UK Trade Tariff: HMRC monthly exchange rates, average rates and spot rates, VAT Act 1994, Schedule 6, paragraph 11, VAT Notice 700, section 7.6, Transactions in foreign currencies and VAT, Converting foreign currency amounts for the customs value, BIM39515 and CG78310. HMRC's other published rates are covered in our guides to HMRC mileage rates and HMRC interest rates.
If you trade or invoice in foreign currencies and want your VAT and accounts conversions set up correctly, our international VAT and international tax teams can help.