Exchange Rate Differences
Where to enter exchange rate gains and losses on your CT600 in TinyTax. Covers FRS 105 treatment.
How do you handle exchange rate gains and losses on your CT600? If your company has transactions in foreign currencies, this guide explains where exchange differences go in TinyTax.
Where Do Exchange Differences Go?
Enter exchange rate gains and losses in the Other charges field on the P&L.
TinyTax doesn't have a dedicated exchange rate field. Exchange differences — both realised and unrealised — are included as part of your general business expenses.
If You Have a Net Exchange Loss
Add the loss to your Other charges total. This increases your expenses and reduces your taxable profit.
If You Have a Net Exchange Gain
Reduce your Other charges total by the gain amount. If your exchange gains exceed your other charges, the resulting negative figure reduces your overall expenses (increasing taxable profit).
FRS 105 Treatment
TinyTax uses the micro-entity format (FRS 105). Under FRS 105:
- Exchange differences on monetary items (bank balances, debtors, creditors in foreign currency) are recognised in the profit and loss account in the period they arise
- There is no option to defer exchange differences or use hedge accounting
- Both realised differences (from settled transactions) and unrealised differences (from retranslating balances at year end) go through the P&L
Common Scenarios
Foreign Currency Bank Account
Situation: Your company has a USD or EUR bank account.
At year end, the balance is retranslated to GBP. The difference between the opening rate and closing rate is an unrealised exchange gain or loss. Include this in Other charges.
Invoices in Foreign Currency
Situation: You invoice clients or pay suppliers in a foreign currency.
The exchange difference between the invoice date rate and the payment date rate is a realised exchange gain or loss. Include this in Other charges.
Multiple Exchange Differences
Situation: You have both gains and losses from different currencies or transactions.
Net them off. Enter the single net figure (gain or loss) in Other charges.
Common Questions
Q: Are exchange gains taxable? A: Yes. Exchange gains are part of your taxable profit. They're included in Other charges, which feeds into your P&L and ultimately your CT600.
Q: Are exchange losses deductible? A: Yes. Exchange losses reduce your taxable profit when included in Other charges.
Q: My accounting software shows exchange differences as a separate line — do I need to include them? A: Yes. When transferring figures from your accounting software to TinyTax, include exchange differences in Other charges. If you use the trial balance import, this happens automatically.
Q: Do I need to keep records of the exchange rates used? A: Yes. Keep records of the exchange rates for each transaction and for year-end retranslation. HMRC may query exchange differences, particularly if they're large relative to your turnover.
Still Have Questions?
If you're unsure how to handle exchange differences for your company, get in touch.
Last updated: February 2026
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