We have a client who uses Xero to do bookkeeping and submit VAT returns to HMRC. We wanted to find out details about how to make MTD VAT submissions through Xero and below is the response we got from Xero customer services.
Hi Mukkarram
I can confirm clients will need to be signed up to HMRC through their pilot program.
Once this is done, it will then need to be connected to Xero, however It's not yet possible to join Xero MTD just yet, but you will be able to join soon. Thank you for registering your interest.
When it has been connected to Xero, the VAT Return should look different and can therefore be ensured it has been filed with MTD, and not the existing return.
It's best to only sign up clients intended to use the MTD with HMRC for the pilot.
Please keep an eye on our blog for updates.
Xero Website: Making Tax Digital for VAT pilot goes live
Kind regards
I am having a hard time digesting the reply from Xero, especially after Xero has recently given a Steve Jobs style Presentation of introducing its MTD. Everywhere I see it being marketed as MTD compatible and portrayed as its live and now I find out its not MTD ready although the pilot has been running since April 2018.
I would be grateful if any Xero users can confirm that the contents of the email are actually correct and one CANNOT at this time submit MTD VAT through Xero.
Replies (11)
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It wouldn't be ready now because MTD does not start until April next year.
Xero say that the system is written and has been tested over recent months. Some Xero partners have been asked if they want to join the beta testing programme. Their website makes it clear that the MTD facility is in beta testing and nothing that I have heard, including at Xerocon, has claimed that it is fully ready now. It took me all of five seconds to check their site.
You seem quick to dismiss the customer service agent as an idiot. Perhaps you should consider looking into things more carefully before branding somebody else the same way.
Personally I wouldn't be too concerned by this. I know there's not that long until official launch, but I'd be very surprised if Xero didn't have everything lined up nicely for then.
I believe FreeAgent (who we use for 99% of our clients) are already MTD ready or whatever the appropriate terminology is. However from my recent exchanges with them it's clear it's still a learning process, with them asking me about my experience enrolling with HMRC etc. I say that with no criticism, it's just the nature of something new to everyone.
I wasn't aware of the pilot being go since Apr 18, but that may well be right. We signed up as an agent a few weeks ago. I tried to sign up two businesses on it, one temporarily couldn't due to timing of VAT DD, the other was simply rejected, no reason given.
Ie it's still very much in beta phase, with HMRC and software packages trying to figure it all out. Chill out :-)
There is a list of businesses who can do mtd vat now. If they are on this list they have made one or more submissions as part of the live pilot.
Some of the cloud services, however, cannot work out the figures to submit for things like frs. I don't know much about xero, but the list of suppliers who have made submissions is public.
It is still quite difficult to sign up for the pilot, but it will become easier.
'However I am concerned that software companies are not be straight forward in their promotion or advertising. People are being misled.'
After 37 years of being 'sold' software, I can say that the golden rule is that if the software exists and works then it can be regarded as a product. All other 'software', no matter how convincing the hard sell, can be regarded as vapour ware and should be treated with caution as there is no guarantee that it will ever be turned into a real product.
Sage weren't ready when I emailed their tech support in mid-October, although things may have changed since.
Xero could not submit a VAT ANNUAL ACCOUNTING SCHEME return in October. Their support could not tell me if this would be available under MTD.
I'd be wary of anything the software companies say. We'll all be the beta testers in April 2019, as there are so many things that will go wrong between the software and HMRC. It's not reasonable to expect any software company to be ready to go yet. I bet HMRC are miles behind with their own software anyway.