Xero is MTD-ready (before you need to be)

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We’re thrilled to announce Xero’s Making Tax Digital (MTD) for VAT solution went live today – ahead of the 1 April mandation date. It will be available in all Xero plans that support VAT at no extra cost.

Under MTD for VAT, most VAT registered businesses with a turnover above the £85k threshold will have to keep digital records and file their VAT returns using compatible software.

The solution ensures you and your clients are fully compliant with the new HMRC rule.

We’re ready before you need to be

We know you’ve been working hard to prepare for the 1 April because Xero has been with you every step of the way.

Xero accounting and bookkeeper partners have participated in our MTD Learning Journey, soaking up the knowledge from our education workshops and earning themselves the all-important MTD-ready badge.

Others have been utilising the communication toolkit to inform clients of the upcoming changes.

And now we’re live with our brand-new MTD for VAT solution, so you can start migrating clients before the official start date.

Key features

Making Tax Digital doesn’t have to be overwhelming – Xero has been working closely with HMRC for five years to ensure you and your clients are supported through this transition.

After conducting several pilots and gathering feedback from accountants and businesses, we’ve built a whole new VAT process that ensures you and your clients can fulfil your MTD obligations.

New features include a VAT Dashboard, extra reports, the ability to post VAT adjustments and submit in real-time to HMRC.

How to activate the solution in Xero

Customers must sign up to MTD for VAT with HMRC – it’s not possible to submit MTD VAT returns without doing this first.

Next, you’ll be asked if you wish to enable the MTD VAT return solution in Xero (this message will appear when you open the VAT return section of Xero).

Those that have signed up with HMRC need to enable the MTD VAT return feature in Xero. Those that haven’t should continue to file non MTD VAT returns.

If you and your clients have been participating in our beta programme, you don’t need to do anything – you’re already set up.

Next steps

If your accountancy practice manages clients above the VAT threshold, and they’re not yet on MTD compatible software, we recommend you start migrating them now.

If you have clients using Sage or Quickbooks desktop products, you can convert them for free using Movemybooks. Join our live webinar on 26 March 2019 to learn more.

For those using bespoke software that isn’t compliant with MTD for VAT, Xero is also offering a bridging software solution. The feature will allow your clients to continue using spreadsheets to calculate VAT and keep digital records. It’ll launch in the coming weeks so keep an eye out for updates.

MTD webinars

To help you get set up with MTD, we’re hosting a series of live webinars for partners and businesses starting from 21 March to 18 June 2019.

Partners: Register now to hear from our MTD product experts, who will talk you through the various MTD for VAT features and answer any questions you may have about the scheme.

Businesses: Join one of our live webinars to get up to speed with Xero and find out how to get ready for Making Tax Digital.

If you still have questions on Making Tax Digital, contact your Xero Account Manager or email partnerteam@xero.com. If you’re a small business, please contact your advisor or touch base with our support team via Xero Central.

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