Limitations – Xero – Workarounds – VAT/Tax

Some tax/VAT transactions including those with custom tax rates, EC VAT, reverse charges or unusual tax transactions will be converted as closely as possible but are likely to be different. We may use a standard rate of tax or No Tax and then add an adjustment to correct the tax amount if necessary. This could result in some boxes in tax/VAT Returns being incorrect even if the Balance Sheet amount to be paid or refunded is correct.

System tax accounts are merged to become a single tax account as required by Xero.

For more information, please refer to our post-conversion tasks page and also the Tax Returns Don’t Agree page.

Depending on the system you’re converting from and the transactions present, the conversion may result in some rounding differences due to the way tax or line amount totals are calculated differently between systems.

FreeAgent allows non-tax registered companies to enter bank payments with tax. These will be converted with tax.

For conversions from FreeAgent, we apply the current tax registration status of the company to all transactions. If the company has become tax registered in the conversion period, this is likely to cause differences.