Xero Tax set to hit the UK market in March 2020
In a raft of product news at Xerocon 2019, perhaps the most notable was the cloud provider’s announcement that it will roll out its corporation tax and accounts production modules in March 2020.
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I was interested in their announcement of the tie-in with TransferWise, allowing payments to suppliers to be made directly from within Xero. I'm not sure how TransferWise get the cash to fund the outbound payments* (perhaps by direct debit from the business' bank account or perhaps by a manual payment in advance) but this has huge ramifications. Assuming that they put multiple level approval permissions in place, this would allow the external accountant to set up (but not release) payments on behalf of the client (without requiring direct access to the client's bank account) and the client need merely log into Xero and approve it.
*"Customers start the process in Xero by submitting payment details, which are then sent to TransferWise. Once the customer has funded the payments from their bank account, TransferWise will process the payments to the suppliers’ bank accounts. To use the solution, you’ll need to set up a TransferWise account (or use your existing business profile account), which acts as a clearing account for the payments."
Rod Dury announced Xero final accounts a few years back. Despite my questions on this many times Xero, like our politicians, did not answer the question asked.
I will believe the announcement when I see the product. I do not trust Xero's announcements anymore.
Not a massive fan of xero, will test it out when I can but I don't like to put all my eggs in one basket either.
Yay! Just like Sage Online can do it right now, and also self employed and personal tax returns.
Like the sound of the Transferwise integration though.
Well quite.
Whilst integrated can certainly be useful, it is only good if it saves time overall.
CT is not that complex, but the "best of breed" programmes have a lot to contend with when it comes to losses CA's etc, if that is not good you are going to waste more time on that end than you save on a bit of cut'n'paste and duplicated journaling in Xero and on the desktop..
I tend to work on the desk in excel/cross referencing to Xero, directly posting all the changes as I go, then download the final TB to shove through our accounts prep. Admittedly this can mean some mapping to do, but surely you have to do that in Xero too.
It will however presumably suit the "look ma no hands" style practices who just sluice the data through to final accounts without much if any thought or analysis, plus allow punters to file more garbage with HMRC without us lot.
Oh well shareholders can just wait another few years for their Xero dividends then. As with payroll, it is trying to run before it has learnt to walk. Yet again.
Xero market cap 5.8 billion. A staggering 18 times sales. No dividends ever paid in its 15 years or so of history.
If this were a similar tech. company in 1999, we would know with 95% probability how this story ends.
Well ... I'd take a difference stance to you on this. It's not that staggering in the tech space and Google (Alphabet), facebook, twitter are doing ok without paying a dividend. Apple didn't pay a dividend for many years. xero posted a half year profit this year (+ve free cash flow).
Mmm. With this company the devil is always in the details. See my numerous posts on this topic regarding Xero results. In the past there has in my view been a wide disconnect between the issues that management draw investors' attention to, and what sensible investors should be looking at.
Mmm. With this company the devil is always in the details. See my numerous posts on this topic regarding Xero results. In the past there has in my view been a wide disconnect between the issues that management draw investors' attention to, and what sensible investors should be looking at.
I think there is a trend especially with tech companies and unicorn companies (big and small) that investors these days tend to look more at capital growth than dividends.
Is your issue with xero with xero themselves or a general dislike of the wider tech sector and their crazy valuations? I am not trying to challenge you here, just interested in what your specific beef with xero would be.
It's both. More generally numerous tech. companies on silly valuations crashed and burned in 2000 or so and this fed out into the wider economy. It seems to me, with trade wars and Brexit, a bit of tech stock crashings is all the world needs to trigger recesssion.
Some of my most successful investments over the years have been low or zero dividend payers. As an investor I look for companies run by people who tell it like it is in their annual reports. For high P/E low dividend companies this is even more important as they are not putting any bread directly on your table.
In my view, the Xero annual report is a masterpiece of misdirection, smoke and mirrors. You don't have to take my word for this. When their results come out you'll find plenty of shills eulogising the results on this site, who in my view have not read much further than page 2.
I can make 3 or 4 notes on a Xero report - clue I always start from the last page where the dead are more likely to be buried - and then as I get towards the front I am looking for comments by management tackling those key issues.
With Xero you are very lucky if just 1 of them gets mentioned, it's usually 0. I am out, not investible for me.
Ok cool. Sorry, I was reading in that you had issues with their product. I will take your word for their financials, I've never look at those at anything more than a google skim search level.
I have issues with the product as well. The payroll is very poor, with none of the reports I most use with other software products, to tie the trial balance numbers into what we 've been sending to HMRC.
I don't like the way it does VAT cash accounting either. Call me old school if you like, but if a company has a 30 September year-end and a September VAT quarter and pays VAT by direct debit, then if V is the 30 September VAT return amount, V should also be the control account balance.
Not V plus or minus all the cash accounting adjustments invoice by invoice.
I try to use Xero as little as possible, mainly because EVERY SINGLE Xero client I have had - admittedly only 5 - who do their own book-keeping and use me for the corporation tax is unable to get their Xero trial balance bank current account agree to their actual bank statement balance.
Having identified that issue, it's then clear that when I look into the expense accounts any number of "click and post" invoices have often been stuck in the wrong nominal account.
I enjoyed the Xerocon event and do see the benefits of having a linked bookkeeping and accounts production system.
However I'd rather have all clients within one accounts production software, I don't want two systems to learn, and two different formatting layouts. If Xero allowed the accounts production to produce accounts for non-Xero clients I would consider it, but if not then...nope.
@Mr Hankey. I have a general question for you. Aren't clients presenting accountants with a bit of a fait accompli in that if you want to pick up a new client, you're going to have to embrace their bookkeeping package too? (I maybe missing your point though).
Like others have mentioned, it will only work if you can also do non Xero client tax returns.
Also, is this going to be available directly to the client? If so all of a sudden client's believe they can just file what's in Xero straight to HMRC and we all know how that will go. Accountant's are Xero's bread and butter (their words) and it wouldn't be the first time they made a blunder, like recently when they slashed the prices to the public by 50% whilst selling block discounted subscriptions to accountants to get client's onboard.
I'm scared to think what the price will be.
@tanyajackson. I had the same thought too - will end clients eventually get this functionality and if they do, where does that leave accountants?
I run payroll through xero and it works a treat and it has saved me quite a bit in bureau fees. (I am a big fan of xero).
I had a chat with my Xero account manager about this and asked whether it would be available to business users or just accountants/xero partners.
She said that it would be available to business users too and they'd be able to prepare FRS102 S1A and FRS105 accounts and CT600, but seemed to suggest that it would mainly be marketed towards xero partners.
A bit concerning considering the nonsense accounts you occasionally see at Companies House.
Hi Daniel, Xero Tax is only available for Xero accounting and bookkeeping partners on the Xero partner programme.