Xero Tax and Xero Workpapers: how year end fits together with XPM

What Xero Tax and Xero Workpapers each do

Xero Tax is Xero’s tax return and lodgment software for practices. In Australia it covers individuals, companies, partnerships, trusts and SMSFs, plus activity statements. It pre-fills individual returns and activity statements with ATO data, imports trial balance amounts from the client’s Xero organisation, and collects client signatures with Xero Sign.

Xero Workpapers is newer. Xero built it with BGL and launched it in Australia on 27 November 2025, inside XPM, Xero Tax and Partner Hub. It gives you a working trial balance, checklists, templates, review points with preparer and reviewer statuses, rollover from the prior year, and a lock for the finished pack. Xero says adjustments in Workpapers are drafted without changing the ledger.

The year-end order of work

Each product picks up where the last one stops, so the order you work in decides how much you redo. Get the ledger final first, then build the pack, then prepare the return.

1. 01

   Close the bookkeeping.

   Reconcile the client’s Xero file to 30 June, including the inter-entity loans between related entities.

2. 02

   Post the year-end schedules.

   Calculate Division 7A, equipment finance interest and amortisation, and post the journals to Xero. Doing this before the pack means Workpapers imports the final balances.

3. 03

   Build and lock the Workpapers pack.

   Work through the checklist, clear the review points and lock the pack once the reviewer signs off.

4. 04

   Prepare the return in Xero Tax.

   For a company, the final figures flow from the locked pack. For other entity types, check Xero’s current guidance first.

5. 05

   Sign, lodge and close the job.

   Send the return for signature with Xero Sign, lodge it, then close the job and bill the time in XPM.

A worked example: Bull Antics Pty Ltd’s 2026 company return

Bull Antics Pty Ltd is the trading company in the Bull family group, one of AccountKit’s sample groups. It has loans to Ryan and Ashlee Bull caught by Division 7A, an inter-entity loan with the family trust, and an excavator on finance. The figures are made up; the order is the point.

• July: the bookkeeper closes June in Xero, and the inter-entity loan with the trust is matched on both sides so the two files agree.
• Early August: the manager runs the Division 7A schedules for each loan and posts the interest and any deemed dividend journals to Xero, then posts the year’s equipment finance interest.
• Mid August: the accountant builds the Workpapers pack from the now-final trial balance, works the checklist and raises two review points.
• Late August: the reviewer clears the points and locks the pack. The company return in Xero Tax picks up the final figures.
• September: Ryan signs with Xero Sign, the return is lodged, and the job is closed and its time billed in XPM.

How Xero Tax returns link to XPM jobs

In XPM, a tax return is attached to a job when the job is created. Practices on Xero’s own Product Ideas forum have asked since 2022 for a way to move a return to another job afterwards, so set the job up before you start the return.

Xero doesn’t say that lodging a return changes the job’s status or creates an invoice. Plan for the job to be closed and billed as its own step, in whatever system your team uses to run the work.

Where Workpapers Plus and AccountKit overlap

Xero’s Workpapers Plus upgrade includes a Division 7A worksheet, in early access in Australia from August 2026. If your firm adopts it, you have two places that can work out Division 7A.

The difference is what happens to the result. AccountKit keeps every loan’s schedule year to year, models repayments and posts the interest and dividend journals straight to Xero. It also covers the year-end jobs Workpapers doesn’t, such as matching inter-entity loans across two Xero files and equipment finance interest. Many firms will use both: AccountKit to get the ledger final, and Workpapers to document and review it.

New Zealand and the UK

Xero Tax is a different product in each country. In New Zealand it files with Inland Revenue through its gateway services, covering IR returns, GST, IR10 and AIM statements. In the UK it files corporate, partnership and personal returns and accounts with HMRC and Companies House, with an optional company accounts add-on.

The new Xero Workpapers was in beta in New Zealand and the UK from January 2026. Check Xero’s page for your country before you plan your year end around it.

How AccountKit fits alongside Xero Tax and Workpapers

AccountKit doesn’t prepare or lodge returns, and it doesn’t replace Xero Tax, Workpapers or XPM. It does the work that has to happen before the pack: the schedules and journals for Division 7A, inter-entity loans, equipment finance and amortisation, posted to Xero. Then it runs the job, with client details syncing both ways with XPM and time flowing to it for billing.