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Set up vat in xero –

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This article is for small businesses who use Xero. Check HMRC’s website for more information. HMRC will send you an email within 72 hours confirming you’re on the new service. Before signing up, you should file all previous and current returns. If you’re a tax agent signing up clients, follow HMRC’s step by step guide for agents. You can then authorise Xero to send VAT returns digitally. To use MTD, you need the adviser or standard with view reports user role in Xero. Check the VAT number in financial settings is correct.

In the Accounting menu, select Reports. The How would you like to file your VAT? Click Continue after signing up. Xero will send you to HMRC’s website. Click Continue. Complete the following tasks see HMRC’s step by step guide for agents for full details :. Copy across existing clients or authorise new clients for your account. The connection you create will apply to all of the clients linked to your agent services account.

Click Continue with agent services account. Log in to HMRC using your agent services credentials. Once access is granted, the new VAT overview will show in your client’s organisation. Ask our community of customers, accountants and bookkeepers. Skip to main content Search icon Search Xero Central. Have your Government Gateway login details ready. What’s next? Still have questions? Start a discussion Ask our community of customers, accountants and bookkeepers. Contact Xero support Raise a case with our support team.

 
 

Change your VAT registration status – Xero Central.Change your VAT registration status – Xero Central

 
Log in to Xero and select the client organisation you want to connect to HMRC. · In the Accounting menu, select Reports. · Find and open the. In the Accounting menu, select Advanced, then click Financial settings. · Under Sales Tax, select your Tax Basis for sales tax reporting. If.

 

Set up vat in xero.Understand your VAT overview

 

Ask our community of customers, accountants and bookkeepers. Skip to main content Search icon Search Xero Central. Click Organisations at the top of the page.

Click Activate. Click Settings. Optional To update any of the financial details, click Edit in financial settings and make the changes. Xero uses UTC time zone information.

Your time zone provides the basis for the date stamp Xero applies to time tracked actions. For example, when users log in, or make changes to transactions. Ask our community of customers, accountants and bookkeepers. Skip to main content Search icon Search Xero Central. Breadcrumbs Your Xero account Your Xero organisation Set up your organisation’s financial settings Set up your organisation’s financial settings. Overview The information entered in your financial settings is used to produce your reports and sales and purchase transactions.

Financial settings include your financial year end, sales tax basis, tax identification number, time zone and lock dates.

Your financial settings include the information Xero uses to create reports and apply sales tax to transactions. You can set lock dates to stop users from making changes to transactions, for example in in past periods.

Xero uses your timezone to set the date in transactions. You’ll need the standard or adviser user role to set or change most of the financial settings.

Only advisers can set or change lock dates. To change your financial year end date in Xero: In the Accounting menu, select Advanced , then click Financial settings. Under Financial Year End , click Change. Select your financial year end day and month. Click Done. It controls how sales tax is calculated overall based on the individual rate used on each line item. The tax rate selected for each line item is the actual percentage used to calculate the tax on that line.

The transaction total displays either the total tax for the item as being included in the subtotal or excluded and added on depending on the tax treatment chosen for the transaction.

The tax rate selected for each line item defaults to the rate set for the account, unless you’ve set a specific rate for the customer or supplier. You can also change to another tax rate for just this transaction as required. Xero calculates tax for rates that have more than one component by totalling up all the components and applying that rate to the line amount.

Each component is displayed in the tax subtotal once the invoice or bill is approved and on the print PDF version. Find out more about components and rates when creating your own tax rates.

Items without a tax rate If you don’t want sales tax to be included at all on your transaction, you need to use No Tax. Select this for Amounts are on invoices or bills each time you create a transaction, or clear the Include tax checkbox on bank transactions and journals. There is a default rate for transactions that you want to be exempt from sales tax. Line items that use this rate, along with transactions that have amounts set to No Tax , will be grouped together on the Sales Tax Audit report if you need a total for transactions that were exempt from sales tax.

What’s next?

 
 

Set up vat in xero. Connecting Xero to HMRC

 
 

If you change the date, there will be other considerations if you’ve:. UK website. If you change your VAT registration scheme or basis after filing VAT returns after filing returns, you may need to review some transactions. If you select a flat rate VAT scheme, Xero:. We suggest archiving the flat rate specific VAT tax rates when you do this — to prevent accidental use. You can set defaults for sales and purchase transactions you enter into Xero.

Use these to set whether you add transaction amounts as tax exclusive or tax inclusive values. You won’t see this option if you selected None as your sales tax accounting basis. To do this:. Lock dates stop users from adding or changing transactions if the transaction has a date that is on or before the lock date. Lock dates can either apply to all users, or only users who don’t have the adviser user role.

Xero uses UTC time zone information. Your time zone provides the basis for the date stamp Xero applies to time tracked actions. For example, when users log in, or make changes to transactions. Ask our community of customers, accountants and bookkeepers. Skip to main content Search icon Search Xero Central.

Breadcrumbs Your Xero account Your Xero organisation Set up your organisation’s financial settings Set up your organisation’s financial settings. Overview The information entered in your financial settings is used to produce your reports and sales and purchase transactions. However, if you previously used the older version of the non-MTD VAT return, late claims from those periods are only recognised if the late claim conditions were met.

Includes the VAT calculated on sales or income transactions for the period using any:. The total VAT calculated on purchase transactions for the period using any:. These will be offset by a VAT reclaimed amount in Box 4. The total VAT due, calculated by adding boxes 1 and 2 together. The total VAT calculated on purchase transactions using any:. The full amount of transactions recorded using the VAT on imports tax rate.

The total VAT exclusive sales amounts from transactions using any:. The total VAT exclusive purchases amounts from transactions using any:. HMRC requires these amounts to be reported on an accruals basis, even if you prepare your VAT return under the cash scheme.

It is calculated from transactions using any:. To view the transactions that make up the totals on the VAT return, select the Transactions by tax rate tab. The total also includes amounts from transactions using any Reverse charge tax rate — note that an offsetting amount is included in Box 4. This box includes the VAT purchase transactions using the standard rates for transactions using any:.

This box includes The VAT portion of transactions using any:. If your organisation was previously not registered for VAT and is becoming VAT registered, you’ll need to make the following changes. If you’re an accountant or bookkeeper with a client on Xero’s Cashbook, you’ll need to change their pricing plan to VAT Cashbook to allow their organisation to generate VAT returns.

To update your chart of accounts in bulk, export it from Xero , make the changes, then import it back into Xero. You can now begin to use Xero as VAT registered. Edit a spend or receive money transaction. Edit an awaiting payment invoice. Adjust the VAT amount on paid transactions. Ensure that you follow this process only after all VAT transactions are fully accounted for and the VAT returns filed. If you’re not sure, check with your accountant or bookkeeper.