Our view at Stack - Xero is a cloud-based accounting platform that offers numerous benefits. It simplifies financial management with automated bank feeds, allowing you to save time on data entry. Create, email, and print professional invoices effortlessly. Access your finances in real time via the cloud from any device. Retain records of income, expenses, assets, and liabilities securely online. Whether you’re a small business owner or an accountant, Xero streamlines your financial processes and provides a clear view of your financial health.
As outlined in the autumn Budget, the UK government is committed to delivering Making Tax Digital (MTD) for income tax Self Assessment, which will be mandated in April 2026. We’re pleased that this gives accountants and bookkeepers more certainty on timings as they prepare for this deadline.
At Xero, we’re ready for MTD for IT and will be participating in HMRC’s public testing phase from April 2025. To do this, we’re enhancing our UK plan offerings to ensure we meet clients’ future filing requirements.
Introducing the enhanced Xero Cashbook plan for MTD for Income Tax
We’re adding enhancements to our existing Xero Cashbook plan, so you’re able to support small business clients at all stages and needs of MTD for IT.
Xero Cashbook is an existing partner plan which provides bookkeeping essentials for non-VAT registered clients. It’s available to buy now so you can get businesses ready for the change. It will include everything that’s in the current Xero Cashbook plan (including automated bank feeds, cash coding and reporting), plus these new features:
- MTD for IT filing functionality
- Easy data capture with Hubdoc to pull key documents such as receipts into Xero automatically
- The ability to send up to 10 invoices and quotes per month
- Improved client access options
We plan to add the Hubdoc, invoicing and client access features to existing Xero Cashbook plans from April 2025.
Now is a great time to consider moving clients onto a Xero Cashbook plan ahead of April. This will help your practice get a head start on moving clients onto a digital platform and using bank feeds, so they’re ready for MTD. Plus, Xero Tax can support your clients with their current self-assessment needs, and is available to Xero partners at no additional cost.
When will Xero’s MTD for IT functionality be available?
Xero plans to launch an MTD for IT beta from April 2025 so that accountants and bookkeepers can take part in HMRC’s public testing phase. Xero is HMRC-recognised as ready for MTD for IT.
MTD for IT functionality will be available in the enhanced Xero Cashbook plan in addition to being included in our line-up of current UK business plans. A version of the enhanced Xero Cashbook plan will also be available for small businesses to purchase directly later in 2025. This means we’ll have plans that support businesses at all stages and complexities, and the opportunity to move plans as their needs change.
What happens next?
As we get closer to HMRC’s public testing phase for MTD for IT in April 2025, we’ll be in touch with more details on eligibility and how you can sign up for Xero’s beta.
MTD for IT is a big push to support small businesses through this significant change and offers a real opportunity for you to build even closer relationships with your clients by helping to get them into good digital habits. But it’s not just on you; we’re here to listen and work with you. We’ll be rolling out webinars and other supporting content in the coming months to help you and your clients prepare for MTD for IT. Please keep an eye on the MTD resource hub.
We know this will mean initial work for you and your clients, but when regulation impacts accountants and bookkeepers, the industry always adapts, finding ways to create new opportunities from the changes. MTD for IT will be no different, and we hope it will make the accountant and small business relationship even stronger.
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Credit: Original article published here.