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The short answer
The currency on your invoice decides who carries the exchange-rate risk. Invoice in pounds and your income is fixed in pounds, while your Nigerian client carries the risk of the naira falling and must find pounds to pay you. Invoice in naira and the client pays a fixed naira amount, while you carry the risk that the naira weakens before you convert. Many UK freelancers invoice in pounds for larger or longer jobs and agree naira only where the client cannot source foreign currency, with a fixed conversion date written into the contract.
What the invoice currency actually decides
An invoice is a promise of a fixed amount in one currency. Whichever side is not naturally dealing in that currency has to convert, and so carries the risk that the rate moves between the quote and the payment. For a UK freelancer and a Nigerian client, the trade-off looks like this:
| Invoice in pounds | Invoice in naira | |
|---|---|---|
| What you receive | A fixed pound amount | A fixed naira amount; pounds depend on the rate when you convert |
| Who carries FX risk | The client | You |
| Client's practical hurdle | Must buy pounds or pay from a foreign-currency account | Pays from an ordinary naira account |
| Your practical hurdle | Receiving an international payment | Receiving naira and converting it |
| Effect if the naira weakens before payment | Client pays more naira | You get fewer pounds |
Why naira matters to Nigerian clients
Nigerian businesses face rules on how they price and settle. TheCable's summary of the Central Bank of Nigeria's FX Manual (3 June 2026) reports that Nigerian entities are expected to price and settle in naira, with exemptions for certain sectors, and that personal travel allowance is capped at $4,000 a quarter for adults. A Nigerian company paying a foreign supplier generally buys the currency through its bank with supporting documents, which can take time. A client with an existing domiciliary (foreign-currency) account may pay from it more easily.
None of this stops a Nigerian client paying a pound invoice; it explains why some ask to pay in naira, and why a pound payment may arrive later than a domestic one. The Nigeria-side paperwork is covered in Form A and Form M explained.
How to choose
Invoice in pounds when
- your costs are in pounds and the job is large enough that a weaker naira would hurt;
- payment terms are long (30 days or more), so the rate has time to move;
- the client already pays foreign suppliers or holds a domiciliary account;
- the client is a multinational or a Nigerian company with foreign revenue.
Consider naira when
- the client is a small Nigerian business that cannot easily source pounds;
- the job is small or paid upfront, so the exposure is short;
- you have naira costs of your own, such as family support or a project in Nigeria, so you would not need to convert everything.
Three ways to share the risk
- Pound price, naira payment at an agreed rate. Quote in pounds and let the client pay the naira equivalent at a reference rate on a named date (for example the rate quoted by a named provider on the invoice date). The contract should say which rate and which day.
- Naira price with a review clause. Quote in naira, but allow the price to be revised for later milestones if the naira moves more than an agreed percentage.
- Deposit upfront. Whatever the currency, a deposit shortens your exposure; see taking deposits from Nigerian clients.
Whichever you choose, put it in the contract before work starts, not on the invoice after it ends. A client who agreed a pound price at the start has accepted the currency risk; one who first sees pounds on the final invoice has not, and that is where disputes start.
A worked example
Example only, with made-up rates. You quote a Lagos client for a website at £2,000, or ₦4,000,000 at an assumed rate of ₦2,000 to £1 on the quote date. Payment is due in 30 days. Suppose by then the naira has weakened to ₦2,200 to £1.
| Invoiced £2,000 | Invoiced ₦4,000,000 | |
|---|---|---|
| Client pays | £2,000, costing ₦4,400,000 (2,000 x 2,200) | ₦4,000,000 |
| You receive in pounds | £2,000 | £1,818.18 (4,000,000 / 2,200), before conversion costs |
| Who absorbed the move | Client: ₦400,000 more | You: £181.82 less |
If the naira strengthened instead, the effect would reverse. The point is not that one choice is always better, but that the invoice currency decides whose problem a rate move becomes.
What to write on the invoice and contract
- The currency, stated with the amount (GBP 2,000.00 or NGN 4,000,000.00).
- Who pays transfer charges, so you receive the full amount.
- For naira payments agreed off a pound price: the reference rate source and date.
- Payment details for the currency you invoiced, and the due date.
- For UK tax, your records should show the pound value of naira income; HMRC's SA106 notes tell you to convert foreign income at the rate when it arose and point to HMRC's published exchange rates, covered in converting naira invoices to pounds.
Where Pryme fits
A Pryme Business Account holds GBP and NGN with local account details for each, so a Nigerian client can pay naira into Nigerian account details while a UK client pays pounds into UK details. Money stays in the currency it arrived in until you Swap it; the app shows the rate and the fee before you approve. You can raise invoices in either currency from Invoicing, and the multicurrency account keeps the balances side by side.
Questions people ask
Should I invoice my Nigerian client in pounds or naira?
Invoice in pounds if you want your income fixed and the client can source pounds; agree naira if the client cannot, and accept that you then carry the exchange-rate risk until you convert.
Who bears the exchange rate risk on an international invoice?
Whoever has to convert. On a pound invoice the Nigerian client does; on a naira invoice the UK freelancer does.
Can a Nigerian company pay a foreign invoice in pounds?
Yes, usually by buying the currency through its bank with supporting documents, or from a domiciliary account. CBN rules expect Nigerian entities to price and settle domestically in naira, which is why some clients ask to pay in naira.
How do I record a naira invoice for UK tax?
Keep the pound value in your records. HMRC publishes exchange rates you can use; agree a consistent method with your accountant.
Sources
- TheCable: CBN FX Manual 2026, key provisions (3 Jun 2026) · accessed Oct 2026
- HMRC SA106 Foreign notes 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.