HMRC is the UK's tax authority responsible for collecting taxes, administering benefits, enforcing customs regulations and overseeing Making Tax Digital.
Her Majesty's Revenue and Customs is the UK government department responsible for the country's tax system. HMRC collects income tax, corporation tax, VAT, National Insurance, capital gains tax, stamp duty and excise duties. For UK businesses, key HMRC obligations include MTD-compliant VAT return filing, PAYE and National Insurance reporting through Real Time Information (RTI), corporation tax returns, Construction Industry Scheme (CIS) reporting and annual accounts filing. HMRC operates an increasingly digital-first approach, with Making Tax Digital requiring businesses to maintain digital records and submit returns through compatible software. Penalties for late filing and payment are applied through a points-based system. SortBooks helps UK businesses keep their Xero records accurate by suggesting the right account and VAT code for miscoded transactions, while VAT returns are still filed from Xero.
SortBooks helps with the bookkeeping behind hmrc (hm revenue and customs) by connecting to your Xero account and using AI to suggest the right account for transactions sitting in catch-all accounts, learning from your own past coding. Instead of fixing hmrc (hm revenue and customs) by hand, you review each suggestion, approve it, and SortBooks updates Xero, GST code included. Then ask the AI CFO about your numbers, using live Xero data.
Making Tax Digital is a UK government initiative requiring businesses to keep digital records and submit tax returns through HMRC-compatible software.
VAT is a consumption tax charged on goods and services at each stage of production and distribution. Businesses collect VAT on sales and reclaim VAT on purchases, remitting the net amount.
PAYE is the system used in the UK, Ireland, New Zealand and other countries where employers deduct income tax from employee wages and remit it to the tax authority.
Tax compliance means meeting all your obligations to file tax returns, make payments and maintain records as required by your country's tax laws and tax authority.
Corporation tax is the UK term for the tax levied on company profits. The main rate is 25%, with a reduced rate of 19% for companies with profits under GBP 50,000.
Connect Xero, check the AI's suggestions and approve the changes. SortBooks updates Xero for you.