VR & AR Guide 5: Digital Tax Accounts & Software: Preparing Your Business for a Seamless MTD Future 

Introduction

As HMRC modernises the UK tax system, traditional tax returns are giving way to Digital Tax Accounts—your all-in-one “online bank account” for tax. These secure portals will let you: 

• View your tax and VAT position in real time 

• Update your details instantly 

• Pay liabilities as you go, smoothing cash flow 

To make the most of this transition, businesses must maintain fully digital bookkeeping and submit quarterly summaries directly from their accounting software. 

Making Tax Digital for VAT is already here, and Making Tax Digital for income tax is being phased in from April 2026. 

Why Xero + Dext Are Your Ideal MTD Partners

1. Xero: Your Cloud Accounting Hub

• Real-time Data Sync: Bank feeds, expenses, and sales all feed automatically into your Xero Digital Tax Account. 

• Quarterly Filing Made Easy: Xero’s Making Tax Digital (MTD) compliance tools guide you through submitting your Income Tax and VAT updates in just a few clicks. 

• Centralised Dashboard: One place for invoices, bills, payroll, and tax reports—no more hunting through spreadsheets.

2. Dext Precision: Paperless Record-Keeping

• Capture on the Go: Snap receipts and bills via mobile or email, and Dext extracts the data instantly. 

• Automated Coding: Custom rules and supplier mappings ensure transactions land in the right ledgers every time. 

• MTD-Ready Submissions: Your quarterly summaries in Xero reflect every receipt and invoice captured by Dext, giving HMRC the up-to-date digital records they require. 

Your Roadmap to Quarterly Digital Reporting 

1. Onboard to Xero & Dext 

• We’ll set up your chart of accounts, bank feeds, and Dext rules. 

2. Train Your Team 

• Virtual workshops and video guides ensure everyone knows how to code transactions and submit MTD updates. 

3. Automate Data Capture 

• Get hands-free receipt processing with Dext, synced directly into Xero. 

4. Quarterly Check-Ins 

• We review your Xero dashboards, run MTD compliance checks, and help you file your digital summaries. 

5. Ongoing Support 

• As rules evolve, we keep your software configured, your team trained, and your accounts audit-ready. 

Next Steps

Don’t wait until the deadline looms—move to Xero and Dext now to: 

• Eliminate paper record stress 

• Achieve real-time visibility over cash flow 

• Confidently meet your MTD obligations 

Book a Demo with our Outsourcing team today and secure your business’s digital tax future. 

Plus Accounting — Your trusted partner for cloud accounting, digital tax compliance, and proactive financial support. 

Disclaimer: This leaflet is intended for guidance purposes only and we recommend that you take specific advice before taking any action or relying on these notes. Plus Accounting is a trading name of Feist Hedgethorne Limited. Registered to carry out Audit work in the UK and regulated for a range of investment business activities by the Institute of Chartered Accountants in England & Wales.

Want to learn more?

Get in touch with our in house expert Emma Hardwick to see how we can help.