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UK VAT returns in Xero for a USD base currency co.

UK VAT returns in Xero for a USD base currency co.

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I have a client that is setting up a UK entity with USD functional currency that will need to file UK VAT returns. We really want to use Xero as we have lots of integration and procedures set up for it for another GBP entity, but Xero cannot handle UK VAT + non-GBP functional currency (despite customers asking for it for at least 8 years!). Has anyone come up with a workaround for this scenario? I'm wondering about having two Xero instances, one in USD for all of the records, and another in GBP into which we will simply enter GBP converted totals for the VAT return each quarter (although I guess this might breach MTD rules). Any thoughts/suggestions please?

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By johnt27
30th Jun 2020 11:34

Set it up in Xero as GBP functional currency, then use one of the reporting apps to report in USD. Given you have a connected entity I'm assuming you'll want to report on these entities together so a reporting app will capture both easily.

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By whatdoyoumeanwashe
30th Jun 2020 11:53

Many thanks, that's helpful. Is there a reporting app you'd recommend? We won't be reporting the entities together as whilst they are managed together, they have different ownership.

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Replying to whatdoyoumeanwashe:
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By johnt27
30th Jun 2020 12:34

Lots of choices here, if reporting in Xero doesn't work (see other comments), Spotlight, Fathom and Futrli all good options

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By BigBadWolf
30th Jun 2020 12:06

Actually you don't need another app to report in USD - as long as you have the multi-currency version of Xero - you can just run the P&L and Balance Sheet in USD using the "more options" dropdown on the reports.

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Replying to BigBadWolf:
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By johnt27
30th Jun 2020 12:31

True! I'd forgotten you can do this - it's under the old (blue) reports rather than the new ones

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By whatdoyoumeanwashe
30th Jun 2020 12:40

Thanks for this. Isn't that going to give me different figures than a true USD ledger though? I'm going to have FX gains and losses where there should be none?

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Replying to whatdoyoumeanwashe:
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By johnt27
30th Jun 2020 13:05

Whether reporting in Xero or using an app the reporting in USD would revert the FX movements you'd see when reporting in GBP

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