In this article, I’ll run through 5 benefits of using Xero for MTD. Such as, how easy it is to submit your digital VAT returns. Or even how simple Xero makes it to electronically store all of your paperwork on the Cloud, and much more.
For starters, when MTD was introduced in April 2019, thousands of business owners like yourself were looking for a compatible software that was easy to use for digital VAT returns following MTD guidelines, and that’s when Xero stepped in.
Xero offers an intuitive, yet comprehensive software that allows integration of multiple Apps that you may already be using. This is why we believe Xero is the heads above the rest.
Keep reading to learn the 5 benefits of using Xero for MTD.
Table of contents:
- 1. You Can Go Paperless
- 2. You Have Visibility Of All Historic MTD Returns
- 3. You Can See Any New VAT Updates Published By HMRC
- 4. Xero Knows When Your VAT Return Is Due Even If You Do Not
- 5. You Know Exactly What Is Due To And From HMRC
You Can Go Paperless!
As we all know, HMRC asks business owners to keep all business records for 6 years from the last year-end, this means as a business owner it may be hard to keep track of paperwork.
One of the main benefits of using Xero to store paperwork and submit your MTD VAT returns is that you can attach all your purchase and sales invoices on your Xero software and dispose of all the loose paperwork and receipts you have lying around at home or in the office.
All invoice attachments can be viewed with the click of a button. If you, a customer, supplier or HMRC want corresponding paperwork that relates to any of your transactions you will simply be able to select and download the original.
Another benefit of going paperless and keeping all your records in Xero means that everything is easy to find and you can search for within seconds.
You Have Visibility Of All Historic MTD Returns
On your Xero accounting software under your VAT heading you can clearly and easily see full visibility of all your previous MTD VAT returns.
You can look who submitted the return, what date the return was submitted and exactly how much you are due to pay or HMRC are due to pay to your business. If you are not using Xero you can also see this if you have HMRC online logins for VAT services, you can sign up for this here on the gov website: www.gov.uk.send-vat-return
You Can See Any New VAT Updates Published By HMRC
A third benefit to using Xero as your accountancy software for submission of your VAT returns is that the VAT tab includes all new releases and updates published by HMRC.
The information is shown at the top of the screen and is there to allow the business owner to read through any information before you submit anything to HMRC.
For example, all new information about deferred payments was published here and the change from 20% to 5% on certain goods relating to the hospitality sector has been published. Xero provides you with a snapshot of any new information that may affect your VAT return before you get a chance to submit it.
Not only does this improve your knowledge of the always updating VAT guidance given from HMRC but it ensures that the information you are submitting to HMRC is correct and accurate.
Xero Knows When Your VAT Return Is Due Even If You Do Not
Another massive benefit to using Xero for your MTD needs is that you will be able to see exactly what is due and when.
Xero has fantastic visibility so you are aware if anything is overdue, it will be shown in red on your Xero VAT tab and will tell you exactly how many days your return is overdue for submission.
It will also tell you how many days you have left before your next submission is due.
This is a massive help as business owners like yourself may not have the time to keep up to date with all the filing deadlines and submissions that you need to so Xero is there to help remind you. You will avoid late submission fines and be on top of your tax affairs.
RELATED: Get your FREE Xero Health Check here
You Know Exactly What Is Due To And From HMRC
The biggest benefit of using Xero for your MTD is that you can see exactly what you have due to pay and you know exactly when it is due to be paid.
Xero has the functionality to show you the vital information that you want to know.
You will be able to see what you are owed or what you owe to HMRC, the date that it needs to be paid and if you have a direct debit in place, this information will also be available to you so you can avoid making multiple payments in error.
Xero easily allows you to be able to see what money you will be paying out in the future or what money will be coming back to you allowing you to plan so that you know exactly where your cash position stands.
There are and have been a range of accountancy software’s that have been introduced or adapted to function with MTD, if you would like further information on this please contact us at Northern accountants or consult the Gov website. More information on MTD can be found here: www.gov.uk/topic/business-tax/vat
There you have it, 5 benefits of using Xero for MTD.
I hope that you’ve gained enough valluable information from this article to make an educated decision on what software you should be using.
In our opionion, Xero is the best software for business owners, big or small.
If you need more advice or information on Xero, and how you can use it, please don’t hesitate to get in touch today using the links below.
Robyn Jones is a Cloud Accountancy Specialist at Northern Accountants. Her role is to maximise our clients’ experience by utilising her technical accounting knowledge and being able to advise on the best practice to enhance business growth and stability.