UK Chart of Accounts for Xero with VAT Codes (Free)

This is a UK chart of accounts built specifically for Xero, with the right VAT treatment baked into every account using Xero’s own tax-rate names. It comes as a readable reference (CSV) and a ready-to-import CSV that carries the VAT code on each account, so a new Xero organisation arrives correctly coded instead of defaulting everything to standard or no VAT.

Two files, both for Xero

• The reference CSV lists: every account with its class, its default Xero VAT code, the allowed alternatives where more than one code legitimately applies, and a note explaining why.
• Xero import CSV is formatted to Xero’s chart-of-accounts import, with the real Xero tax-rate names in the Tax Code column, so accounts import already coded.

The account VAT code is a default, not a rule

This is the part worth understanding before you rely on it. In Xero the tax rate on a transaction line is chosen by priority: the contact’s default tax rate first, then the inventory item’s, then the account’s default, and you can always override a line by hand. So the VAT code on an account is the lowest-priority fallback that prefills the line. That is exactly what you want: a sensible starting point that is right most of the time and easy to change when a specific transaction differs.

That is also why the CSV lists allowed codes alongside the default. A travel account defaults to zero-rated because rail and bus are the common case, but it lists standard 20% as the allowed alternative for the hotel or taxi that lands in the same account.

The UK VAT defaults that matter

The chart encodes the treatments UK bookkeepers most often get wrong, using Xero’s names:

• 20% (VAT on Income) on sales, 20% (VAT on Expenses) on most purchases.
• Exempt Expenses on insurance, bank charges, and residential rent, where input VAT cannot be recovered. Deliberately not zero-rated, because the recovery rules differ.
• Zero Rated Expenses on travel (rail, air, bus) and books.
• No VAT on wages, depreciation, and client entertainment, where input VAT is blocked.
• Reverse Charge Expenses (20%) flagged as the allowed code on software and services bought from overseas vendors.

What the import leaves out

The import CSV excludes the system control accounts, accounts receivable, accounts payable, the VAT account, and retained earnings, because Xero creates them automatically. Importing your own would duplicate them. The CSV reference still lists them, marked as system accounts, for completeness.

How to use it

1. Open the CSV and adapt the account names and codes to the business, keeping the VAT defaults.
2. In Xero, go to Accounting, then Chart of accounts, then Import, and upload the CSV.
3. Import into a demo or new organisation first, and confirm the tax rates match your org.
4. Use the allowed-codes column to brief whoever codes transactions on the legitimate alternatives per account.

Keeping the codes right on every transaction afterwards is the recurring work, and where most VAT-return errors creep in:

• Hubdoc remembers the coding for recurring suppliers.
• ExpenseFlow reads each receipt and bill, applies the correct UK VAT code for the supply including the exempt and reverse-charge cases, and posts it into Xero against the right account, so the chart you imported stays correctly coded as volume grows.
• Dext applies supplier rules so repeat costs land in the same place with the same code.

The chart uses standard range-based numbering, assets in the 1000s, liabilities 2000s, equity 3000s, revenue 4000s, cost of sales 5000s, and overheads 6000s, with gaps between codes so a new account always has a free number in the right range without renumbering the rest.

Using QuickBooks instead? See the UK chart of accounts for QuickBooks. For the codes themselves, see the UK VAT codes in Xero reference.