How to Cancel a Xero Subscription

At Towerstone Accountants we provide specialist limited company accountancy services for directors and owner managed businesses across the UK. We created this webpage for business owners who want practical guidance on choosing and using accounting software, including day to day bookkeeping tasks, invoicing, bank feeds, and reporting. Our aim is to help you keep accurate records, reduce admin time, and stay compliant with HMRC and Companies House requirements.

Cancelling a Xero subscription is usually straightforward, but it is one of those tasks where the timing and preparation matter just as much as the actual cancellation. I often speak to business owners and directors who want to cancel Xero because they are closing a company, switching accountants, moving to a different system, or no longer trading. Others assume cancelling is as simple as stopping payment, only to find invoices still being raised or access suddenly cut off before records are secured.

In this guide I will explain exactly how to cancel a Xero subscription in the UK, who can do it, what happens when you cancel, and what you should do before and after cancellation. I will also cover common mistakes, how cancellation interacts with accountants and advisers, and what to consider if your business is closing or becoming dormant. By the end, you should be able to cancel Xero confidently, without losing access to important data or creating unnecessary problems.

What Xero is and who controls the subscription

Xero is cloud based accounting software used by many UK businesses for bookkeeping, VAT, payroll, and reporting. Each Xero organisation has an active subscription attached to it, and that subscription controls access to the software.

One of the most important points to understand is this.

Only certain users can cancel a Xero subscription.

Usually, this is:

• The subscriber

• The organisation owner

• Or a user with billing admin permissions

Accountants and bookkeepers often have access to the data, but they cannot always cancel the subscription unless they are also set as the subscriber.

Common reasons people cancel Xero

There are many legitimate reasons for cancelling a Xero subscription.

Common scenarios include:

• Closing a limited company

• A business has stopped trading

• Switching to a different accounting system

• Moving to spreadsheet based records

• Changing accountants who use different software

• Reducing costs for a dormant company

Cancelling Xero does not mean you are doing anything wrong, but it does need to be done properly.

Before you cancel, what you should check first

Before clicking cancel, I strongly recommend pausing and checking a few things. This step prevents most problems I see.

Confirm why you are cancelling

Ask yourself:

• Is the business closing or just dormant

• Will you need access to records again

• Are there outstanding filings or reports needed

If the company still needs accounts prepared, VAT returns submitted, or HMRC queries answered, you may want to delay cancellation.

Check who is paying for Xero

Sometimes the business pays for Xero directly. In other cases:

• The accountant pays and recharges

• Xero is bundled into an accountancy package

You need to be clear whether cancelling Xero will also affect your relationship with your accountant or breach any agreement.

Download or save important data

Once a Xero subscription is cancelled, access is restricted.

Before cancelling, you should download:

• A full chart of accounts

• Trial balance

• Profit and loss reports

• Balance sheet

• General ledger

• VAT reports

• Payroll reports if applicable

These reports are essential for record keeping and may be needed years later.

How to cancel a Xero subscription step by step

If you are the subscriber or billing admin, the cancellation process itself is relatively quick.

Step one, log into Xero

Log into Xero using the account that controls billing.

Make sure you are in the correct organisation if you manage more than one.

Step two, go to subscription and billing

From the main menu:

• Click on your organisation name

• Select Settings

• Go to Subscription and billing

This area shows the current plan, billing cycle, and payment method.

Step three, select cancel subscription

Within the subscription page, you should see an option to:

• Cancel subscription

Xero may ask you to confirm the reason for cancellation. This is for feedback purposes and does not affect the process.

Step four, confirm cancellation

Once you confirm:

• The subscription will be cancelled at the end of the current billing period

• You will not usually receive a refund for unused time

• Access continues until the end of the paid period

Always read the confirmation screen carefully so you understand when access will end.

What happens after you cancel Xero

Cancelling a Xero subscription does not instantly delete your data.

Typically:

• The organisation becomes read only after the billing period ends

• You can still log in and view data for a limited time

• Editing and filing functions are disabled

Xero retains data for a period in line with its data retention policy, but you should not rely on indefinite access.

If you think you may need to reactivate later, it is important to keep login details safe.

Cancelling Xero when closing a limited company

This is one of the most common situations I deal with.

If you are closing a limited company, timing is critical.

You should usually:

• Keep Xero active until final accounts are prepared

• Submit final VAT returns if registered

• Submit final payroll filings if applicable

• Resolve any HMRC queries

Only once all compliance work is complete should you cancel the subscription.

Cancelling too early can make it harder or more expensive to finish the closure properly.

Cancelling Xero for a dormant company

If a company is dormant, you may not need a full Xero subscription.

Options include:

• Cancelling Xero entirely after downloading reports

• Downgrading to a cheaper plan

• Using spreadsheets instead

Dormant companies still have filing obligations, so make sure records are retained even if Xero is cancelled.

What if your accountant set up Xero

In many cases, the accountant is the original subscriber.

If that applies:

• You may not see the cancel option

• You will need to ask the accountant to cancel it

• Or request billing control to be transferred

Do not assume stopping payment will cancel the subscription. Xero will continue to invoice the subscriber.

Cancelling Xero payroll separately

If you use Xero Payroll, this is part of the subscription, not a separate cancellation.

Before cancelling:

• Submit final FPS and EPS filings

• Close the payroll scheme with HMRC

• Download payslips and payroll reports

Once payroll access is removed, recreating historical payroll data can be difficult.

Cancelling Xero and VAT considerations

If your business is VAT registered:

• Make sure all VAT returns are submitted

• Download VAT reports

• Confirm VAT deregistration if applicable

HMRC may ask for records years later, and Xero reports are often relied on as evidence.

What happens to bank feeds after cancellation

When Xero is cancelled:

• Bank feeds stop updating

• Historical bank transactions remain visible while access is available

You should download bank transaction reports before cancellation to avoid gaps in your records.

Can you reactivate a cancelled Xero subscription

Yes, in many cases you can reactivate.

If the organisation still exists in Xero:

• You can reactivate by resubscribing

• Data is often restored as it was

However, reactivation is not guaranteed indefinitely, and pricing or plans may have changed.

This is another reason to download reports before cancelling.

Common mistakes when cancelling Xero

Over the years, I see the same issues repeatedly.

Cancelling too early

This often causes delays and extra costs when final accounts are needed.

Assuming data is stored forever

Xero retains data for a period, but this should not replace proper record keeping.

Forgetting linked services

Xero may be connected to apps, bank feeds, or reporting tools that also need attention.

Not checking who pays

This can lead to invoices continuing to be raised unexpectedly.

Record keeping after cancelling Xero

UK businesses are required to keep records for several years.

I recommend retaining:

• PDF copies of key reports

• CSV exports of transactions

• Payroll and VAT documentation

These records should be stored securely and backed up.

Cancelling Xero as part of a software switch

If you are moving to another system:

• Export data from Xero first

• Confirm what the new software needs

• Run parallel systems briefly if needed

A rushed cancellation can result in missing opening balances or incomplete migration.

How I advise clients on cancelling Xero

When clients ask me about cancelling Xero, I focus on sequence.

I usually say:

• Finish compliance work first

• Download everything you might need

• Confirm no one else relies on access

• Then cancel

Most problems arise not from cancelling itself, but from cancelling at the wrong time.

Xero billing and refunds

Xero subscriptions are usually billed monthly.

Important points:

• Cancelling does not usually trigger a refund

• Access continues until the end of the billing period

• Failed payments do not automatically cancel access immediately

If there is a billing dispute, it should be raised directly with Xero support.

What cancelling Xero does not do

Cancelling Xero does not:

• Close your company

• Deregister you from VAT

• Close PAYE schemes

• Inform HMRC automatically

It is purely a software subscription change, not a legal or tax action.

Final thoughts

Cancelling a Xero subscription is technically simple, but practically important. The key is not how you cancel it, but when and why you do it.

In my experience, the businesses that have the least trouble are those that treat Xero as part of their compliance process rather than just a piece of software. They make sure all filings are complete, records are downloaded, and responsibilities are clear before cancelling.

If you approach cancellation methodically, there is no reason it should cause stress or problems later. If you rush it, you may find yourself needing access again when it is least convenient. Take a little time to prepare, cancel at the right moment, and keep good records.

You may also find our guidance on what is xero and xero vs quickbooks vs sage helpful when exploring related accounting software tasks. For a broader overview of software options and setup guidance, you can visit our accounting software hub.