Xero is great — for standard VAT
Xero is one of the UK's most popular accounting packages. For businesses charging standard 20% VAT on all sales, it works brilliantly. But the VAT Margin Scheme is a different beast, and Xero simply wasn't built for it.
What Xero can't do
- No per-item margin tracking — Xero can't calculate VAT on a per-item margin basis
- No stock book — HMRC requires a dedicated stock book for every eligible item; Xero has no such feature
- No margin scheme VAT return — you can't generate a VAT Margin return from Xero without extensive manual work
- No eBay/Amazon integration for margin items — marketplace integrations don't distinguish margin from standard stock
What accountants say
Most accountants who work with motor dealers, antique dealers, and second-hand goods businesses ask their clients to maintain a separate spreadsheet alongside Xero. This is time-consuming, error-prone, and often incomplete by the time the VAT quarter arrives.
How AutoVAT and Xero work together
AutoVAT doesn't replace Xero — it fills the gap Xero leaves. Here is how the two work side by side:
- Purchases bookkeeping — AutoVAT records every eligible stock purchase with all the details HMRC requires: supplier name and address, purchase date, description, and purchase price. These feed directly into your stock book without any manual entry.
- Sales bookkeeping — When you sell an item, AutoVAT logs the sale, calculates the margin, and records the VAT due. Every line is traceable back to the original purchase record.
- Xero integration — AutoVAT pushes your reconciled purchase and sale totals, along with the correct VAT figures, into Xero so your overall accounts stay accurate. Your accountant works in Xero as normal — they just receive numbers they can trust.
We build and manage the integration to match your exact setup — the platforms you sell on, the accounting method you use (individual or global), and how your Xero chart of accounts is structured. You don't need to configure anything yourself.
The result
Your VAT Margin records are complete, compliant, and exportable. Your accountant gets accurate figures in Xero. You save hours every month on bookkeeping — and have everything you need ready before every VAT quarter closes.
