Paypal IPN sending 'pending' with 'multi-currency' as reason?

Right I've finally worked out what the issue was and managed to resolve this so thought I would post an answer to my own question in order that it may help people in future.

Firstly log in to your Sandbox Developer Site (where you set up all your fake accounts etc). https://developer.paypal.com/developer

We need to be logged in to this site in order to be able to then log in to the Sandbox Paypal Business Account.

Leave yourself logged in to the Sandbox Developer Site above and open a new tab and go to the Sandbox Paypal Business Login: Sandbox Business Login

Now you'll probably see your "pending" transactions in the list. You can choose to "Accept" a pending transaction and the next page will allow you to alter your payment recieving preferences.

I ticked the radio box "Yes, accept and convert them to British Pounds" in answer to what to do with payments from a different currency.

That sorted it for me. Hope it helps someone else along the way.

Thanks to the other posters for their help on this as well. It helped me get to the bottom of it.

Login at your main PayPal account (not sandbox), go to Seller preferences and click on update Block payments.

Please try to follow the instructions below to turn off the Payment Review function for your Sandbox account:

Go to PayPal Developer Website
Log in to your developer account
Click Applications
Click Sandbox accounts
Click on to the email address that you would like to turn off the Payment Review option and click Profile after it expand
Click Settings
And select Off for the Payment review.
Click Close

!!! Make sure you are doing this on your PayPal SandBox Merchant Account!