Stripe Integration with Xero – How to Connect Stripe with Xero?

The creator economy is reshaping how businesses handle finances

The digital creator economy continues to grow at an extraordinary pace. Entrepreneurs are building SaaS applications with AI tools like Lovable, Replit and Cursor, monetising audiences through paid newsletters on Substack and selling courses on Kajabi. Whether you are a solo creator or a growing startup, you need a reliable way to collect payments and generate compliant invoices. In the United Kingdom, this means connecting Stripe with a cloud accounting platform like Xero. Here is everything you need to know about making that connection work.

What is Stripe? Its role in the new economy

Stripe is the world's leading online payment infrastructure platform. According to the Stripe Annual Update 2024, Stripe processes more than one trillion dollars in annual transactions across over 40 countries. As described in Stripe: Thinking Like a Civilization, Stripe has evolved from a simple payment processor into the complete financial infrastructure of the internet.

For UK-based businesses, Stripe supports card payments, Direct Debit, Apple Pay, Google Pay, Klarna and other popular payment methods. Its API is exceptionally well-documented and allows you to automate everything from one-off charges to sophisticated subscription models with metered billing, free trials and automatic dunning. Stripe is the default choice for tech-savvy entrepreneurs who want a seamless payment experience without building payment infrastructure from scratch.

What is Xero and why use it?

Xero is a cloud-based accounting platform that has become one of the most popular choices for small businesses and their advisors in the United Kingdom. Founded in New Zealand and now serving millions of subscribers worldwide, Xero has established a strong presence in the UK market with features tailored to local requirements.

Key features of Xero:

- Cloud-based bookkeeping with automatic bank feeds from over 21,000 financial institutions
- Invoicing with customisable templates, recurring invoices and online payment links
- VAT management with automated VAT calculations and MTD-compatible filing
- Bank reconciliation with AI-powered suggested matches
- Expense claims with receipt capture via the Xero mobile app
- Payroll with RTI submissions, pensions auto-enrolment and payslips
- Multi-currency accounting with automatic exchange rate updates
- Financial reporting including profit and loss, balance sheet, aged receivables and cash flow
- Project tracking with time tracking and profitability analysis
- Inventory management with stock tracking and purchase orders
- Over 1,000 connected apps via the Xero App Store
- Developer API via developer.xero.com with OAuth 2.0 authentication
- MTD-compatible for VAT return submission to HMRC

Xero stands out for its beautiful interface, its strong advisor network (used by thousands of UK accountants) and its extensive ecosystem of connected apps. It is particularly well-suited for small to medium businesses that want a modern, cloud-first approach to accounting.

Can you connect Xero with Stripe?

Yes – Xero offers a native Stripe integration through the Xero App Store. This integration allows you to connect your Stripe account to Xero and automatically import Stripe transactions as a bank feed. You can then reconcile these transactions against invoices in Xero, significantly reducing manual data entry.

Additionally, Xero provides a comprehensive API with endpoints for invoices, contacts, accounts, payments and more. This enables more advanced automation scenarios – for example, automatically creating Xero invoices based on Stripe subscription events, or syncing customer data in real time.

For businesses that need a more tailored solution – such as custom invoice formatting, multi-entity setups or specific VAT handling logic – striptu.com offers a global platform for connecting Stripe with local accounting systems across Europe. The striptu.com team can build advanced Stripe–Xero integration workflows in just seven days, with an affordable subscription plan and ongoing support.

Use the form below to request your integration.

Invoice requirements in the United Kingdom

Under HMRC regulations and the Value Added Tax Act 1994, a valid VAT invoice in the UK must contain:

- Supplier's name, address and VAT registration number
- Customer's name and address (plus VAT number for B2B transactions)
- Unique invoice number in a sequential series
- Invoice date and supply date if different
- Description of goods or services supplied
- Quantity and unit price excluding VAT
- VAT rate: 20% (standard), 5% (reduced) or 0% (zero-rated)
- Total VAT amount broken down by rate
- Total amount including and excluding VAT
- Currency of the transaction
- Discount details where applicable
- Reverse charge notation where required

UK invoice types include full VAT invoices (supplies over £250), simplified invoices (supplies under £250) and modified invoices (retail over £250). All invoices must be kept for at least 6 years.

Making Tax Digital (MTD) in the United Kingdom

The UK's Making Tax Digital (MTD) programme, administered by HMRC, is the country's primary digital tax compliance framework.

MTD for VAT: in effect since April 2019 for businesses above £85,000 turnover, extended to all VAT-registered businesses from April 2022. Businesses must maintain digital records and use MTD-compatible software to submit VAT returns, with digital links between all data sources.

MTD for Income Tax (ITSA): rolling out from April 2026 for self-employed individuals and landlords with income over £50,000, with the threshold reducing to £30,000 from April 2027.

The UK does not mandate e-invoicing in the European sense. PEPPOL e-invoices are accepted voluntarily, but there is no B2B or B2G obligation. Post-Brexit, the UK is outside the scope of the EU's ViDA directive, though HMRC is actively exploring enhanced digital reporting.

Xero is a certified MTD-compatible software provider, enabling direct VAT return filing to HMRC. Its native bank feeds, combined with the Stripe integration, provide a solid foundation for digital record-keeping compliance.

Summary

Xero is one of the UK's most popular cloud accounting platforms, with a native Stripe integration that makes it straightforward to import payment data and reconcile transactions. For more advanced needs, Xero's comprehensive API and the support of striptu.com enable fully automated invoice generation based on Stripe events – operational in just seven days. With MTD requirements continuing to expand and digital compliance becoming the norm, having Stripe and Xero connected is an essential step for any digital business operating in the United Kingdom.