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Xero HQ VAT pilot primed for take-off

31st Jul 2019
Editor in Chief (interim) AccountingWEB
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MTD pilot testing
iStock_Test pilot_3dmentat
MTD pilot testing

Xero has moved into the final testing phase ahead of the rollout of its practice control tool for Making Tax Digital, Xero HQ VAT.

The forthcoming VAT admin centre is a dedicated area within the Xero HQ dashboard designed to give accountants sight of where their clients stand in the MTD for VAT workflow.

Currently being tested by 50 firms ahead of the autumn release, Xero HQ VAT will give practitioners the ability to organise and filter views to see which clients are due to file MTD for VAT returns and where they are in that process, according to Xero’s UK head of partner Damon Anderson.

The VAT module will also make it easier for firms to see all their VAT clients to identify who’s in MTD and who’s not – and opt them in where necessary. “They’ve got to go through the HMRC process to sign in. Accountants with authorisation will be able to move all their clients at scale into MTD – it’s a massive time-saver,” said Anderson.

The software uses HMRC’s application programming interfaces (APIs) to retrieve and display data on each client’s next submission date. The firm can use this information to set up alerts to start the VAT process in good time.

“We really wanted to release it before the first quarterly stagger date, but we’ve been collecting feedback to adjust the product and ensure that HMRC can support practices and VAT submissions in much larger numbers,” Anderson said.

Xero’s general ledger connects to Xero HQ, so when the tax adviser sees a filing is due, they can identify and fix errors in the books to ensure the returns they submit are based on accurate data, he explained.

Xero HQ VAT gives a flavour of how Xero is approaching tax workflows within accounting practices and points to how it is going to handle statutory accounts, corporation tax and income tax when the developer releases new modules based on its Instafile acquisition.

“The first iteration [of Xero HQ VAT] is very simple and designed to support accountants dealing with MTD for VAT,” Anderson said.

“We also have about 1,000 accounting practices piloting Xero Tax, which will produce final accounts and corporation returns tax directly from the Xero ledger. We think there’s a great opportunity to take what we’ve got with VAT and use those two-way connections with HMRC on corporation and income tax.

“We have a single sign-on as part of that experience and the ability to attach electronic signatures on tax returns. Alongside MTD, we’ll build out self assessment features and leverage HMRC APIs to make that as slick as possible.”

Even with 1,000 volunteers onboard, Anderson said, “We’re always wanting more” and encouraged interested firms to contact him about the beta testing programme via [email protected].

“Xerocon is going to be the first opportunity to see all of this and for us to tell the story about Xero Tax and MTD and what the future holds.”

Replies (4)

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By David Gordon FCCA
01st Aug 2019 10:21

This is interesting, and may be useful, but except and until Xero and or similar legal persons clearly answer the previous stream of comments regarding ownership of Data on the Cloud, I am out.

Thanks (1)
By Charlie Carne
01st Aug 2019 10:35

The ability in the forthcoming update to Xero HQ to see a list of all clients whose VAT returns are due is excellent and is one that I wish Intuit would follow. QBOA uses a very basic, Trello-like task management tool, when any practice wanting real PM software will probably use something much more sophisticated like Senta, Accountancy Manager or Karbon (unless they use the big, integrated suites). QBO already knows which clients have filed their VAT returns (because it's flagged in each company file), so 'bubbling up' that data to a single interface in QBOA should be simple, but Intuit ignores that and, instead, unfortunately spends its resources on producing a second-rate PM tool.

I love using QBO but I wish they would focus on its core function (and reporting on data derived from that) rather than trying to build a basic version of the big suites. Cloud is about best of breed and links between products, not integration into a single product. Xero is guilty of the same thing, but at least, in the VAT admin centre, they are launching a product that leverages key data that they already hold.

Thanks (2)
By Dandan
02nd Aug 2019 00:45

I am not sure the APIs will cope with all this. There were designed to achieve a specific purpose : 1)Retrieve your VAT obligations and 2)submit you VAT Return.

They were not designed to be played around with as a client management tool.

Every request generates a response which contains several hidden codes that makes possible the submission of a Return.

If thousands of accountants (each with thousands of VAT clients) start making calls to the APIs in vain , just to bulk update their clients' position, this would probably bring the system down .

In any case, using cloud for sensitive data is not something I am keen on.

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Replying to Dandan:
By johnhemming
02nd Aug 2019 05:32

There are five vat APIs. Two of them have nothing to do with vat returns. All apis use oauth2 which is a cloud function (in the sense that it requires a vendor web server)

I have written code to manage the status of vat submissions but it runs at the weekend when the hmrc servers are less busy. There are supplier rate limits on api calls.

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