Xero and Personal Tax

A tax return is a document that is annually submitted to HMRC on paper or online that includes information on income and expenses. The tax return displays a calculation of the amount of tax due based on these figures.

Xero introduced Xero Tax, a cloud-based accounting, and tax preparation solution, about a year ago. Numerous accounting firms already use Xero Tax. It consists of verification checks, test submissions, and the capability to contrast the data from the current year with those from the preceding year.

Most accounting partners including Cheylesmore Chartered Accountants have stated that Xero is 90% faster than other tax filing software in their feedback.

The new module connects your client's data from the Xero ledger directly to their business income, instantly populating the tax return. This enables you to file the entire return from within Xero and add other sources. It will decrease the need for human data entry, automate procedures, and improve workflow. You will complete each task in a great deal less time. Xero will continue to develop accounts production in Xero Tax, to eventually include support for sole traders, landlords, and partnerships.

Documents Packs are another thing Xero is working on. They are presently testing this functionality out with their Next Generation Practice Insiders. Document Packs, which are accessible in Xero HQ, make it simpler to gather client papers, share them effortlessly, and quickly obtain the signatures you require.

The personal tax return in Xero Tax consists of:

·       A summary page displaying the return's due date, history of filing, and total amount of tax due

·       a payment report

·       Forms for entering customer information, tax adjustments, account payments, and additional notes in PDF format

·       Summary of the tax computation

Xero users just need to set up their clients on Xero and the good part is clients do not need to buy Xero subscriptions. Business structure can be set up on Xero as a sole trader, individual and other.

Also, there are self-assessment documents available in Xero for example SA100 main tax return, SA102 employment, SA105 UK Property, SA110 tax calculation summary, SA101 additional information, etc.

The personal tax return is reviewed before submission.

Update the status of a tax return once you've done preparing it so that someone else can review it.

Update the status once more to reflect when the client has received the return for evaluation and when they have approved it. Before submitting the return to HMRC, it must pass through these statuses.

In order to indicate that their review is over or that they have forwarded the return to the client for approval, the reviewer can also change the status of the return.

Finally, after the review is done the personal tax return is submitted to HMRC.

Xero changes the return's status to "Filed" once you've submitted it. Xero updates the status to HMRC accepted or HMRC rejected after HMRC processes the return. This is included in the Summary's History section.

You can download a submission receipt from the Summary if the return is approved.

Check the Summary's History section if the return is refused.

To learn more about submitting personal tax returns with Xero and how it will benefit you, schedule a meeting with Cheylesmore Chartered Accountants.