In a Xerocon day one packed with announcements, Xero’s UK MD Gary Turner channelled the spirit of Steve Jobs and left potentially the biggest until last: the company’s move into income tax, corporation tax and accounts production.
The cloud accounting platform will do this via the acquisition of startup and add-on partner Instafile, which Xero announced onstage at its flagship London conference.
As demonstrated on stage later in the morning, Instafile automates the process of tax filing and financial reporting for small UK entities by connecting Xero directly to HMRC and Companies House. Work has already been done ahead of the announcement to integrate the products and means that Xero can now offer its accountant partners bookkeeping, corporation tax, self assessment and statutory filing for small clients.
To win the immediate approval of UK accountants, chief product officer Anna Curzon announced that the Instafiles solution would be available free to Xero’s accounting partners as part of the Xero HQ package.
“We will solve compliance in the UK,” said Curzon. “We’re going to give you powerful tools that allow you to do your compliance work from right within Xero.”
Speaking to AccountingWEB, Turner said the move “future-proofed” the vendor from government’s upcoming moves to digitise income tax and corporation tax (currently due to roll out in 2020), as well as giving businesses and accountants much-requested functionality.
Making Tax Digital public beta
Xero also used the show to announce that as of today it is in full public beta for Making Tax Digital (MTD), and is encouraging users to sign up.
With the first 20,000 HMRC letters explaining its new digital VAT regime hitting doormats last week, Xero is also stepping up its MTD campaign. In tribute to HMRC’s Hector the Inspector cartoon character, used 20 years ago to remind people to file their self assessment tax returns on time, Turner welcomed Dexter the Digital Tax Advisor as the ‘friendly face’ of MTD.
Xero launched the campaign after research revealed less than half of the UK’s accountants (43 per cent) feel prepared for the change, and a sneak preview can be viewed below:
Bank feeds API
During his keynote Turner also touched on Xero’s new bank feeds API, which paves the way for fintech vendors to provide more value to small business customers.
Turner promoted five leading fintech integrations – Tide, Starling, TransferWise, Revolut and Soldo – that give small businesses in the UK access to more financial information, faster than ever, and at no extra cost from their accounting dashboard.
Xero has also now been granted Account Information Service Provider (AISP) status by the UK Financial Conduct Authority, enabling the company to take advantage of Open Banking in the UK.
*This article was amended to clarify that the filing additions mentioned are available for Xero accountant partners, not for small businesses directly*