Xero: Easily Adjust Your Financial Year End Settings

Xero has made some significant improvements to its financial year-end settings. This update comes at a crucial time as the UK prepares for HMRC's basis period reform in 2024 ...

The first major change in Xero's update is the ability to easily adjust your financial year-end. This means that if your business operates on a non-standard financial year, you can now align it with the standard UK tax year (6th April to 5th April). This feature will save businesses time and effort in adjusting their financial records to conform with HMRC's requirements.

"Another significant addition is the extension of the fixed asset period!"

Previously, when a financial year end was changed, Xero would automatically roll back depreciation for fixed assets. With the new update, users can choose to extend the period, for example, from 12 months to 15 months, ensuring accurate depreciation calculations and avoiding any manual adjustments.

Xero has also introduced a new column in its reporting section, specifically for the transition period. This column will display any transitional profit claims and basis period adjustments, making it easier for businesses to track and report on these changes. This feature is especially useful for businesses that have multiple financial years within the transition period.

It is essential to note that the start date for HMRC's basis period reform is the 6th of April 2024. This reform will affect self-employed individuals and partnerships, as their income will be calculated based on the tax year, rather than the current basis period. Xero's update ensures that businesses using the software are prepared for this change and can accurately report their income.

To help businesses understand the impact of HMRC's basis period reform, Xero is hosting a webinar on the 3rd of April. This webinar will provide a detailed explanation of the changes and how Xero's latest update sets you up for a smooth transition. Alternatively, businesses can also refer to Xero's blog for more information on the basis period reform.

In addition to the changes mentioned above, Xero has also made minor updates to its Personal Tax self-employment and partnership income worksheets. These updates include the incorporation of transitional profit claims and basis period adjustments, ensuring accurate calculations for the transition period.

"Xero's latest update makes it easier for businesses to adjust their financial year end!"

They can track transitional data, and prepare for HMRC's basis period reform. With the deadline for the reform fast approaching, businesses must have reliable and efficient accounting software like Xero to ensure compliance and accurate reporting.

If you haven't already, it's time to switch to Xero and simplify your financial reporting.

If anything I've written here resonates with you, call me on 01604 420057 and let's see how we can help you.