Clean up VAT/tax
We do not set your VAT/tax number and return periods although we do convert your tax transactions. This is something that you will want to set immediately.
Go to Accounting > Advanced> Financial Settings
You can now set your VAT/tax details as required.
Filing your last submitted return
Important: Note that when preparing your first VAT/tax Return in Xero (the first to be submitted since converting), it won’t include any unfiled “late” claims relating to prior periods and may be incorrect if we’d had to use some workarounds. We recommend you carefully check the figures in this first Xero VAT/tax Return. If the figures provided by Xero are different to those you need to file, you may need to enter a manual journal or adjustments in Xero necessary to submit the correct figures. This will only affect VAT/tax Returns to be submitted that include converted data. Subsequent VAT/tax Returns containing only entries made after the conversion should not require any manual adjustments. To read more about why VAT/tax Returns may be different for the same period in the old and new software please click here.
File the most recent tax period you’ve already submitted. Xero will then be able to recognise any future transactions entered that are dated back into historical tax period as “late” claims. These will then automatically be included in the next tax Return.
Access the Tax Returns page by clicking Accounting and selecting VAT/Tax Return.
If it’s a UK Xero organisation, you’ll be prompted to choose either “Making Tax Digital (MTD) VAT” or “VAT without MTD”. Choose VAT without MTD and you can always return to setup MTD later.
If you already see an MTD page as per below, then scroll to the very bottom to select “Go to VAT without MTD”.
For all regions, pick the dates for the most recently submitted tax return (the dates shown below are for example only) and then “Create” the Return to show the appropriate details.
Then choose “Finalise VAT/Tax return”
You are hopefully already aware of our tax limitations and that the Tax Returns may not agree. You can adjust the balances or leave them as they are. Once you’ve Finalised the return you should see the following message indicating the return has not been submitted.
For UK organisations, if so required you can now choose the option to Sign up for MTD that will appear on the VAT return page.
