Xero Tax: Everything You Must Know About The UK Tax Features

Xero Tax: Everything You Must Know About The UK Tax Features


Every year, millions of businesses file a tax return to HMRC. With the digital trend, every tax activity takes place online. Xero tax is a cloud-based tax-filing software businesses use to file a tax return. It gives you full control of accounts and tax returns in one place. 

The process of managing, filing, and submitting taxes becomes easier with this software. Due to its usefulness, more and more small businesses use this software daily. Xero applies the XBRL tags to the financial data, which amends easily in the future. To know everything about this tax feature of Xero, read the post till the end.

What Is Xero Tax?

Xero tax is online tax-filing software which offers more control over accounts and tax returns. The cloud-based service offers end-to-end data sharing between clients, companies, and HMRC. The software allows a full-fledged integration with HMRC, which ensures the direct file of tax returns online.


The various features of tax Xero are as follows:

Data Sharing Across Xero

With Xero, data can flow easily across the Xero ecosystem. Due to this, the manual data entry work reduces.

  • Multi-layer security channels protect data related to accounts and taxes.
  • Details of clients and account data easily flow from Xero.
  • It imports the trial amount balance from Xero accounts into tax returns.


Efficient Tax Management

It streamlines the whole process of tax preparation. Tax software files accurate tax returns within compliance.

  • Connects all the data of bookkeeping from Xero.
  • Produce and file accounts online in tax filing forms.
  • Prepare and file personal and company tax returns online. 


Submit Tax Returns Online

It allows businesses and individuals to submit returns online. The software lets you easily file annual accounts and tax returns for clients directly.

  • Submit personal tax returns directly to the HMRC.
  • Submit Xero corporation tax returns to the HMRC.
  • Allows companies and individuals to file accounts online.


Account Production

Different ranges of businesses and individuals can enjoy the features of this software. It supports:

  • Sole traders
  • FRS105
  • Statements of changes in equity
  • Dormant accounts
  • Limited companies
  • FRS102 1A full and abridged.

Read More:-Xero Import Invoices: How To Import & Edit Them Online?

Xero Personal Tax

Xero personal tax lets you prepare a client’s self-assessment tax returns. It directly files the tax with HMRC from Xero. Tax in Xero supports:

  • SA105 UK property
  • SA106 foreign(main elements)
  • SA101 additional income
  • SA100 main tax return
  • SA108 capital gains tax summary
  • SA109 remittance basis, residence, etc.

Create Xero Personal Tax Return

To create Xero personal tax return, go through the steps given below:

  • Firstly, log in to the Xero account.
  • Then, under the Tax tab, select the Personal Tax option.
  • After that, click on the New Tax Return and search for the client.
  • Now, select the Tax Year for which you want to create a personal tax return.
  • Moreover, click on New Schedule to add a schedule.
  • After that, tap the arrow icon and select the Ready To Review option.
  • Then, click the Add icon to add a new item to a schedule.
  • Moreover, tap on the Menu icon and select HMRC Income Tax Rates And Allowances.
  • Then, click on Validate to show any warning and errors for incorrect information.
  • After that, hit the Test In Live button to send a test submission to the HMRC.
  • Finally, hit on the Print button or download the SA100 forms.

What Are Xero Tax Codes?

Xero tax codes are an account’s tax rates and determine how Xero treats the transactions. The following tax codes are available for different accounts in Xero HQ. It uses these codes for GST purposes. Each Xero tax code consists of up to 10 characters. To access the tax codes, you must have access to an advisor or standard user role. 

To see the tax codes:

  • Firstly, go to the Accounting menu.
  • Then, select the Advanced option.
  • Finally, click on Tax Rates.

Review And Submit A Return In Xero Tax

Once you create the tax return, you must send it to the client.

To send the return for a review, follow these simple steps:

  • Firstly, locate the Return option on the dashboard 
  • After that, tap the Resume option.
  • Then, hit the arrow next to the Save button.
  • Finally, select Ready For Review to finalise the process.

To submit the return, follow the steps below:

  • Firstly, locate and tap the Return on your dashboard.
  • After that, click on the View option.
  • Then, tap on the Submit option 
  • Moreover, enter your Government Gateway Credentials in the fields.
  • Finally, tap the Submit button.

Xero Corporation Tax

Xero corporation tax allows businesses to file corporation tax returns directly. With the help of Xero, you can estimate the taxes according to HMRC.

Xero tax supports:

  • CT600A close companies
  • CT600 main return
  • Creative industry claims
  • CT600C group consortium relief
  • Capital allowances, including super deductions claims.

Set Up Xero Tax

Over the years, Xero has been making tax digital with its advanced features. You can register and add users with Xero HQ. Here is the process of setting up taxes in Xero:

Retrieve The Data For Accounts

Here are the steps to retrieve the data-

  • First of all, click the Tax tab in the Xero HQ.
  • After that, select the client in the Accounts and Returns tab.
  • Then, click on the Client’s Xero organisation link to check Year-end Finalise Balances.
  • Next, tap on the New Filing option.
  • Moreover, click Allow Access by selecting the correct Xero organisation.
  • After that, enter the client’s registration number and click the Next button.
  • Then, select the Filing period and Financial reporting standard.
  • Finally, click the Next button.

Edit Partner Name In Xero HQ

You can easily edit your partner’s name if you have the master administrator role in Xero HQ. Here are the steps you need to follow:

  • First of all, select the Settings tab from the dashboard.
  • Now, tap on the Edit Info option.
  • After that, edit the name and other details as per your needs.
  • Finally, hit the Save button.

How To Add A Tax Agent In Xero Tax?

To add any staff member, they must already register with ATO as a tax agent. To add a new tax agent, follow these simple steps:

  • Firstly, select Settings from the Business menu.
  • Now, click on Client settings under the Practice heading.
  • After that, select the Agent tab and tap the Add Agent button.
  • Then, enter the agent’s details like Agent name, number, and ABN fields.
  • In the end, hit the Save button.


Xero Tax allows businesses and individuals to manage and file tax returns online. It streamlines the various activities and submits the tax returns directly to the HMRC. You can easily control the various clients and enterprise accounts in one place. Optimising complex tax preparation and filing saves a lot of time. With the help of this software, personal and corporate VAT returns become easy for businesses.

You can easily adapt the tax software of Xero to your business. If you face difficulty installing and running this software, you can call our experts anytime. MWJ Consultancy offers accounting software support services to businesses and individuals. You can call our experts to resolve issues and errors in your software. We offer software support services in Xero, Sage, QuickBooks, Quicken, TurboTax, TurboCash, etc. For more info, call our experts now.

Frequently Asked Questions

Here are the steps you need to follow:

  • Firstly, go to the Accounting menu and select the Advanced option.
  • Now, tap on the Tax Rates option.
  • After that, click the New Tax Rate and enter your tax details.
  • In the end, hit the Save button.

It includes the GST in your tax statement. The GST percentage is determined by the based GST accounting method. Your activity statement determines the cash inclusion and percentage of tax.

You can create a tax client invoice in Xero HQ. Follow these simple steps to create an invoice:

  • Firstly, click on Clients and open their details.
  • Now, select the New option.
  • After that, click on the Xero Invoice option.
  • Then log in to your account using login details.
  • Finally, add the Tax Client Invoice and process it in Xero.
Xero Tax: Everything You Must Know About The UK Tax Features

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