COMPANIES WARNED NOT TO IGNORE EURO

SMALLER companies who occasionally trade in mainland Europe and Eire have been warned not to ignore the debate on whether the UK will enter the single currency.

The Association of Chartered Certified Accountants (ACCA) have advised that whatever the outcome of any debates or the timing of a referendum, from 1 January 2002, payments to organisations in European countries which have already accepted the single currency must be made in Euros – and not local currency, which will cease to be legal tender.

Chas Ray-Chowdhury, Head of Taxation at ACCA, said: “Many businesses which only occasionally trade with organisations in the Euro zone may be under the illusion that they do not have to consider the Euro until a decision comes from any referendum which takes place in the UK. But whatever their views are on the single currency, they must ensure they are ready to charge for – and pay for – work in Euros.

“They should also consider issues like contracting for work, which will involve costings in Euros, so that potential customers can easily compare them against competitors from the Euro zone on a like-for-like basis.

“Failure to be prepared could be costly.”

The twelve countries currently in the Euro zone are: Austria, Belgium, Eire, Finland, France, Germany, Greece, Italy, Luxembourg, The Netherlands, Portugal and Spain. (CL)