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.”