How to Get Paid by Overseas Clients: A UK Sole Trader’s Guide

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Introduction

Landing an overseas client feels like a win — until you try to figure out how to actually collect the money. Do you send your UK bank details and hope for the best? Invoice in pounds or their currency? And why does £1,000 somehow land in your account as noticeably less?

If you’re a UK sole trader working with clients in the US, Europe, Australia, or anywhere else, the mechanics of getting paid internationally can feel murky and unnecessarily expensive. The good news is that with a bit of planning, you can make it straightforward — and stop losing a meaningful chunk of every payment to costs you barely noticed.

This guide covers every realistic option available to you, explains the hidden costs most people miss, and gives you a clear picture of which approach works best depending on how you work and who you’re working with.

The Hidden Cost Most Sole Traders Miss

Before diving into specific payment methods, there’s one thing you need to understand clearly: the exchange-rate markup is almost always larger than the visible transfer fee.

Your client might pay a small outbound fee at their bank. You might pay a small inbound fee at yours. But sandwiched in the middle is something that rarely appears on any receipt — the spread between the mid-market exchange rate (the “real” rate you’d find on Google) and the rate your bank actually applies.

Here’s the part that makes it hard to shop around: most high-street banks don’t publish that margin at all. Their business tariffs cover account fees, cash handling and cheque charges in detail, and then leave currency conversion to a quoted rate or a general reference to their price list. You can look up what Wise charges — it’s from 0.33%, shown before you confirm. You generally can’t look up what your bank charges until the money has already moved.

The arithmetic is worth internalising, because it lets you evaluate any rate you’re offered. On a £5,000 invoice, every 1% of margin is £50. So the difference between a transparent 0.33% and an undisclosed 2% is around £85 on that single payment — and that’s before any fixed fees. Across a year of regular international clients, it compounds into a serious number.

This is why the payment method you choose matters far more than it might seem.

Your Main Options for Receiving International Payments

1. Standard UK Bank Transfer (Swift/SEPA)

This is the most obvious route — you give your overseas client your UK sort code and account number, and they send a bank transfer. For clients within Europe sending euros, this often works reasonably well via SEPA (Single Euro Payments Area), though since Brexit, UK accounts don’t always benefit from the same low-cost SEPA transfers that eurozone businesses enjoy.

For clients further afield — the US, Australia, Canada — transfers typically travel via the Swift network. This is where things get painful.

The problems with inbound Swift transfers:

• Your client’s bank charges an outbound fee
• Correspondent banks (intermediaries in the Swift network) may deduct their own fees along the way, often without warning
• Your bank charges an inbound international payment fee
• The exchange rate applied is at your bank’s discretion, and as covered above, usually not published

The frustrating part is that the deductions are cumulative and largely invisible in advance. A client sends a round number; you receive something less, with no itemised breakdown explaining where the difference went. For a single payment it’s annoying. Across a year of regular international clients, it’s a real cost.

When it works: Swift is fine if you’re only receiving occasional, large payments and both you and your client are comfortable with the process. It’s poorly suited to regular, smaller invoices, where the fixed fees represent a larger proportion of each payment.

2. Local Currency Account Details (the Smart Alternative)

This is the option most sole traders don’t know exists, and it’s genuinely the best solution for most situations.

Services like Wise Business let you hold a multi-currency account with local banking details in several currencies — a US routing and account number, a eurozone IBAN, an Australian BSB, and more. When you share these with a client, they make what looks and feels to them like a domestic bank transfer. No international transfer, no correspondent bank chain, no Swift charges.

The money arrives in the relevant currency, and you can hold it or convert to pounds at the mid-market rate with a transparent fee from 0.33% depending on the currency pair. That’s dramatically lower than a high-street bank, and crucially, you can see it before you commit.

What this costs with Wise Business specifically:

• Registering and holding money: free, with no monthly fee and no subscription tiers
• Account details to receive in 22 currencies: one-off £50
• Receiving on local rails: free in nine currencies — AUD, CAD, EUR, GBP, HUF, NZD, PHP, SGD and USD
• Converting to sterling: from 0.33%, with a volume discount above £20,000 of transfers a month

Note the wording carefully, because it’s the detail that decides whether this works for you. The free receiving applies to local rails. If your client’s bank routes the payment via Swift anyway — which some do by default, regardless of the local details you’ve given them — Wise charges a fixed fee per payment: 6.11 USD for USD wire and Swift, £2.16 for GBP Swift, €2.39 for EUR Swift. Those are quoted in three different currencies, so convert before comparing.

In practice this means it’s worth telling clients explicitly to send as a domestic transfer, not an international one, using the local details you’ve provided. Most will, because it’s easier for them too.

In practice: You invoice a US client in dollars, share your US account details, they pay domestically, and you receive dollars that convert to pounds at a rate you can see in advance. This also makes life easier for your clients — US businesses in particular are often uncomfortable with international wires, whereas a domestic ACH payment is something they handle daily.

3. PayPal

PayPal is ubiquitous and your overseas clients almost certainly have an account. It’s easy to set up, works in most countries, and clients can pay by card or PayPal balance. For very small or occasional payments, it’s a reasonable stopgap.

The downsides are significant for regular use. PayPal applies a percentage fee for receiving international payments and a separate currency conversion charge on top, and those two stack — the combined cost of receiving a foreign-currency payment and converting it to sterling is considerably higher than the headline receiving rate suggests. PayPal also has a long-documented history of freezing business accounts following sudden activity spikes, which is a genuine operational risk if a single large client payment represents your month’s income.

Check PayPal’s current merchant rates for your specific situation before relying on it, and compare the combined receiving-plus-conversion cost rather than the receiving fee alone. PayPal has its place for small or one-off work, but it’s an expensive habit for regular international clients.

4. Card Processors (Stripe, SumUp, Square)

If you issue invoices with a “pay by card” option, processors like Stripe let overseas clients pay by credit or debit card in their own currency. Card processing is priced per transaction, typically with a different rate for domestic and international cards, plus a currency conversion charge where the payment isn’t in sterling.

For one-off or infrequent payments, this can be genuinely convenient for clients who’d rather pay by card than set up a bank transfer — and convenience gets invoices paid faster. At scale, though, the combined processing and conversion cost is meaningful, so check the current rates for the card types your clients actually use and build it into your pricing if you offer it routinely.

Should You Invoice in Pounds or the Client’s Currency?

This is a practical question with no universally right answer.

Invoicing in GBP is simpler for your own bookkeeping. You know exactly what you’ll receive, in theory, and there’s less currency risk. The downside is that your client bears the conversion burden — their bank converts their local currency to pounds, and you have no visibility or control over the rate they get. If the rate is poor, it might even discourage prompt payment.

Invoicing in the client’s currency is more professional from their side and removes friction on their end. The trade-off is that you now carry the currency risk — if sterling strengthens between invoicing and payment, you receive slightly less in pounds. For most sole traders doing project work rather than long-term contracts, that risk is usually small enough to accept.

The practical middle ground: invoice in the client’s currency, hold local currency account details, receive the payment without conversion, then convert when the rate suits you. This gives you control over when and how the conversion happens rather than having it done to you at a moment you didn’t choose.

A Note on VAT and Overseas Clients

VAT treatment for overseas clients is genuinely complicated and beyond the scope of this article — but it’s important enough to flag clearly.

The rules differ depending on whether your client is a business or a consumer, whether they’re in the EU, the US, or elsewhere, and what type of service you’re providing. Since Brexit, the landscape has shifted again for EU clients. You do not simply charge UK VAT on everything you invoice internationally — in many cases no VAT is charged at all, under the reverse charge mechanism.

If you’re VAT registered, or approaching the threshold, speak to an accountant before you start invoicing overseas. Getting this wrong could mean charging incorrectly and creating problems for your clients, or failing to account correctly to HMRC. Making Tax Digital compliance applies to your UK VAT obligations regardless, so your invoicing records need to be accurate either way.

Practical Tips for Getting Set Up

1. Get your local currency details in place early. Opening a Wise Business account costs nothing; the £50 for account details across 22 currencies is a one-off, and having them ready before your first overseas client removes a lot of friction. If you’ll only ever receive in one or two of the nine currencies covered free on local rails, work out whether you need the full set at all.
2. Tell clients to send domestically. State clearly on the invoice that the details provided are for a local transfer, not an international wire. This is the single most effective way to avoid Swift fees on both sides.
3. State your preferred payment method clearly. Include the relevant details and a payment deadline. Ambiguity costs you days.
4. Keep currency conversion records. Note the rate and date whenever you convert foreign currency to sterling — you’ll need this for your self-assessment return.
5. Don’t accept “net of charges” transfers. If a client says they’ve sent the full amount “less their bank’s fees,” invoice for those fees or ask them to cover charges at their end. Local account details largely avoid this conversation entirely.

FAQ

Do I need a business bank account to receive overseas payments as a sole trader?

Not legally — you can use a personal account for sole trader income. However, most multi-currency payment platforms require a business account setup, and keeping business and personal finances separate makes your self-assessment considerably easier. It’s worth having both.

Will I be taxed on money received in a foreign currency?

Yes. For UK self-assessment purposes, foreign income is converted to pounds at the rate applicable when you received it, or when you converted it. HMRC accepts the use of published exchange rates for this purpose. Keep records of each transaction and the rate used.

Is Wise Business safe to use for receiving client payments?

Wise is regulated by the Financial Conduct Authority and holds client funds in ring-fenced accounts separate from company assets. It’s used by millions of businesses globally and is a legitimate, established provider. It is not a bank, so deposits don’t carry FSCS protection — which for a licensed UK bank now covers up to £120,000 per eligible person, per firm. Safeguarding and FSCS protection are different mechanisms with different resolution timelines, so if you’re accumulating significant balances rather than converting and moving them out, consider holding your reserves at a licensed bank and using Wise for the payment flow.

Does it cost anything to open a Wise Business account?

No. Registering and holding money are free, and there’s no monthly subscription. The one charge to plan for is the one-off £50 for account details to receive in 22 currencies — worth understanding as buying a capability rather than upgrading to a paid plan, because Wise doesn’t operate plan tiers.

What if my overseas client only wants to pay by cheque or bank draft?

International cheques can be deposited with UK banks, but they take weeks to clear and often carry significant fees. If a client insists, factor the delay and cost into your quote. In practice most international businesses are comfortable with bank transfers, especially if you give them local account details that make the payment feel domestic. Cheque-only clients are rare, but they do turn up among older or more traditional businesses.

Conclusion

If you take one thing from this guide, let it be this: the exchange-rate markup costs you more than the fees you can see — and unlike the fees, most providers don’t publish it. High-street bank transfers, PayPal, and card processors all apply conversion margins that quietly erode your income, and most sole traders never do the maths.

The most practical setup for the majority of UK sole traders with regular overseas clients is a Wise Business account with local currency details in the currencies you actually invoice in. It removes friction for your clients, avoids the Swift fee chain, and keeps conversions transparent at a published rate from 0.33%. Opening the account is free; the £50 for the full 22-currency receiving range is a one-off you’ll recover on your first decent international payment.

Beyond that: invoice in your client’s currency where you sensibly can, tell clients to send domestically rather than by international wire, keep clean records for HMRC, and speak to an accountant about VAT before you start sending international invoices.

Getting paid internationally doesn’t have to be complicated — you just need the right setup, and to know which costs are hiding where.

Pricing and features correct at time of writing and subject to change — always confirm current details on the provider’s website before opening an account. This article is general information, not financial or tax advice. We are not regulated financial advisers, and you should consult a qualified accountant about your own VAT position and how foreign income should be reported.