Xero Simple: New tool for sole traders and landlords

Making Tax Digital (MTD) – the phrase on everyone’s lips in the accounting industry.

The next phase of this digital transformation of the UK tax system – MTD for Income Tax Self Assessment (MTD for ITSA) – is launching in April 2026.  For those earning more than £50,000 from self-employment and property, MTD becomes mandatory from April 2026 and it will eventually be extended to any small business or sole trader earning over £20,000 annually.

HM Revenue & Customs (HMRC) has invited businesses to voluntarily start reporting under MTD for ITSA as part of their testing for the new system. Signing up now gives you a chance to learn and adapt to the upcoming changes.

To support sole traders and landlords with MTD for ITSA, Xero has launched their new tool: Xero Simple.

This brand-new MTD-compatible tool will replace the existing non-VAT Xero Cashbook plan and contains new features to support sole traders and landlords with the next wave of MTD for ITSA.

With Xero Simple, non-VAT entrepreneurs will be able to:

• Create and send professional invoices and quotes with ease.
• Capture receipts with Hubdoc.
• Automatically import and download bank transactions.
• Automate bank reconciliation and reporting.
• Send quarterly updates and final declarations, in compliance with MTD for ITSA.

Xero Simple will be available for small businesses to buy directly from summer 2025, but it will launch for accountants and bookkeepers in April 2025 – and as Xero Gold Partners, we’ll be ready to help you unlock the benefits of Xero Simple.

If you are an existing non-VAT Xero Cashbook subscriber, you will be automatically migrated to Xero Simple in April 2025, at no extra cost.

At Butterworth Barlow, we’re proud to be Gold Xero Partners, bringing the UK’s leading cloud-based accounting solutions to businesses like yours.

Our team comprises certified Xero accountants dedicated to providing expert guidance and support. Whether you need assistance with setup, optimisation, or ongoing management, we are here to help.

Ready to streamline your accounting processes with Xero? Contact Butterworth Barlow today.