AI agents for business finance: what they can and can't do
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The short answer
A naira account lets a Nigerian client pay you with an ordinary local transfer, with no foreign currency purchase and no international payment on its side. You then carry the exchange risk and decide when to convert to pounds. For UK tax, the fees are still part of your trading income, recorded in pounds when received under the cash basis, which GOV.UK calls the standard way for sole traders.
Why collect in naira at all
Many Nigerian clients, especially smaller firms and individuals, hold only naira. Paying a UK invoice in pounds means buying foreign currency through their bank, which takes paperwork and time. A naira account in your name turns your invoice into a local transfer the client can make the same day. For a freelancer with several small Nigerian clients, that difference often decides whether invoices are paid on time.
The cost is that you take on the currency risk. If the naira weakens between invoice and conversion, you receive fewer pounds. Our guide to invoicing in pounds or naira sets out the trade-off, and when the naira falls before the client pays covers the tax side.
Options for holding naira from the UK
| Option | What it gives you | Points to check |
|---|---|---|
| Naira account at a Nigerian bank | A NUBAN account number clients know | BVN or NRBVN, identity documents, how you will access it from abroad |
| Domiciliary account at a Nigerian bank | Pounds or dollars held in Nigeria | The client still needs foreign currency to pay into it |
| Multicurrency account with naira details | Naira and pounds in one place | Who holds the naira, and how conversion is priced |
A Nigerian bank account normally needs a Bank Verification Number. Nigerians abroad can enrol for the non-resident version; see our Nigeria guide to the NRBVN for Nigerians abroad.
Converting naira to pounds later
Holding naira is a decision about timing. You can convert each payment as it lands, convert monthly, or keep some naira for spending in Nigeria. The 2026 CBN FX Manual, as summarised by TheCable (3 June 2026), covers how foreign currency moves in and out of Nigeria, so the route and the rate you get depend on the provider. Whatever you use, compare the rate you are offered with the mid-market rate on the day, and look at the fee separately; the rate gap is often larger than the visible fee.
Keep naira for business separate
If the same naira account receives client fees and family money, your records become hard to defend. Use one account, or one labelled sub-account, for business receipts only. It also makes it easier to show a mortgage lender or landlord how you earn.
Recording naira income for UK tax
Fees from Nigerian clients are part of your self-employed income whatever currency they arrive in. GOV.UK describes the cash basis as the standard way for sole traders to record income and expenses: you record income when you receive the money, and you do not pay Income Tax on money you have not yet received. So under the cash basis, a naira payment is income on the day it lands in your account.
You then need a pound figure. HMRC publishes average and monthly exchange rates, available through the UK Trade Tariff service. Pick a sensible method, such as the rate for the month the money arrived, or the actual pounds you got if you converted at once, and use it consistently. Keep the workings.
Example. A client pays ₦1,600,000 on 12 March. If the rate you use for March were ₦2,000 to the pound (an illustrative figure, not a current rate), you would record £800 of income. If you later convert at a different rate, the difference is a currency matter for your accountant, not a change to the invoice. For a fuller walk-through see cash basis or accruals with naira income.
What to check first
- Ask your main clients whether they would pay faster in naira.
- Decide who carries the exchange risk and write it into the contract.
- Choose an account where business receipts are kept separate.
- Agree a conversion habit and an exchange-rate method for your books.
- Check the conversion cost: rate against mid-market, plus any fee.
Telling clients about the change
When you switch a client to naira payments, send the new account details on your letterhead and confirm them by phone. Payment-detail changes are a common route for fraud in both countries, and a client's finance team will rightly ask you to verify. Put the naira amount, the account name and the invoice number in the same message so the client can match them.
Where Pryme fits
A Pryme Business Account can be opened from the UK and holds NGN, USD, GBP and EUR with local account details for each, so Nigerian clients can pay naira by local transfer while UK clients pay pounds. Money stays in naira until you convert with Swap, which shows the rate first and the fee on its own line before you approve. Naira deposits are held by a licensed Nigerian microfinance bank, regulated by the CBN and insured by the NDIC up to the applicable limit. See business multicurrency accounts and open an account.
Questions people ask
Can I open a naira account from the UK to receive client payments?
Yes, several providers allow it. A Nigerian bank account usually needs a BVN or the non-resident NRBVN and identity documents.
Do I pay UK tax on naira my Nigerian clients pay me?
Yes, if you are UK resident and self-employed. Under the cash basis, it is income when received, recorded in pounds.
Which exchange rate should I use for naira income?
Use a consistent method, such as HMRC's published monthly rates or the actual pounds received if converted immediately, and keep the workings.
Should I keep my business naira separate from family money?
Yes. A separate account or sub-account for business receipts keeps your records clear for HMRC and for lenders.
Sources
- GOV.UK: Cash basis (page updated 5 Oct 2026) · accessed Oct 2026
- HMRC average exchange rates, UK Trade Tariff · accessed Oct 2026
- TheCable: CBN FX Manual 2026, key provisions (3 Jun 2026) · accessed Oct 2026
- GOV.UK: Set up as a sole trader (updated 5 Oct 2026) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.