Yes — Xero is HMRC-recognised for MTD for VAT and MTD for Income Tax, and it was among the first packages through the door on both. It keeps digital records properly, maintains the digital links, and files to HMRC through the API. As with any package though, recognition covers the software and not your setup. Xero connected to the wrong VAT scheme, or with a bank feed that dropped in May and nobody noticed, will file returns that are digitally impeccable and factually wrong. Recognition is a floor, not a guarantee. That distinction is the whole reason setup is a job worth doing carefully — the software will do exactly what it is configured to do, including the parts nobody checked at the start.