Xero to bring AI-powered data capture and extraction into platform ahead of Making Tax Digital

London - 17 February 2026 - Xero today announced that it will be bringing AI-powered data capture and extraction directly into the platform for UK customers, with the rollout taking place over the first two weeks of March.

At no extra cost, Xero customers on all business edition plans will soon have the ability to snap photos of their receipts directly through the Xero Accounting App, email documents to a bespoke address, or drag-and-drop over the web.

The changes come at a critical time, because on April 6th, HMRC’s Making Tax Digital for Income Tax (MTD for IT) mandate comes into effect, requiring a large number of small businesses, sole traders, and landlords to keep digital records of their income and expenditure, submit quarterly updates and a final annual submission to HMRC using compatible software.

By embedding advanced Large Language Model technology to extract data, Xero will now be able to read receipts, sales invoices and landlords’ rental statements, captured by the user, in under 20 seconds, saving time previously spent manually entering data.

This technology provides an enhanced level of accuracy and creates pre-populated digital records directly within Xero, making one of the most critical parts of compliance effortless.

Xero will automatically suggest which existing bank transactions match these records, for customers to review and approve.

Kate Hayward, UK Managing Director at Xero said: “Many businesses are still trying to understand the requirements around Making Tax Digital, but with AI the good news with Xero is that data entry doesn't have to be done manually any more, and users can worry less about mistakes. Being able to simply snap and capture in seconds will allow businesses to stay on top of things much more easily. We're pleased to be bringing this functionality to UK customers first, but we won't be stopping there. More features will follow this year.”

The March release is the first set of capabilities that will be made available, initially in the UK, and then to other markets. And in the coming months, Xero will continue to introduce further AI-powered bookkeeping automation and insights capabilities directly within the platform, empowering customers to work smarter and more efficiently.

ENDS

Media Contact

Xero Communications UK | Sophie Whitney | ukpress@xero.com

About Xero

Xero is a global small business platform that helps customers supercharge their business by bringing together the most important small business tools, including accounting, payroll and payments — on one platform. Xero’s powerful platform helps customers automate routine tasks, get timely insights, and connects them with their data, their apps, and their accountant or bookkeeper so they can focus on what really matters. Trusted by millions of small businesses and accountants and bookkeepers globally, Xero makes life better for people in small business, their advisors, and communities around the world. For further information, please visit xero.com.