The UTF8 flag indicates which internal storage format is used for the string. It's usually on when the data has been decoded (from UTF-8, iso-8859-1 or whatever), which means it's usually on when the string contains text. Since you're examining the parsed/decoded XML, it's not surprising it's on. After all, the purpose of XML is to store text, and the purpose of parsing an XML document is to extract the text data within it.

I am trying to use iso-8859-1 and not use UTF8.

You're using neither iso-8859-1 nor UTF-8; you are using unicode characters. You're free to encode those characters using any encoding you wish (e.g. UTF-8, iso-8859-1, etc) when it's appropriate (e.g. on output).

Keeping in mind that \311 is the iso-8859-1 encoding of U+00C9, and that \303\211 is the UTF-8 encoding of the same character, you can see that XML::Simple properly extracts text from XML:

#!/usr/bin/perl

use strict;
use warnings;

use Data::Dumper qw( Dumper );
use XML::Simple  qw( );

$XML::Simple::PREFERRED_PARSER = 'XML::Parser';

my $latin1_xml = <<"__EOI__";
<?xml version="1.0" encoding="iso-8859-1"?>
<root>\311ric</root>
__EOI__

my $utf8_xml = <<"__EOI__";
<?xml version="1.0" encoding="UTF-8"?>
<root>\303\211ric</root>
__EOI__

my $xs = XML::Simple->new();
for my $xml ($latin1_xml, $utf8_xml) {
    my $tree = $xs->XMLin($xml,
        ForceArray => 1,
        KeepRoot   => 1,
    );
    local $Data::Dumper::Useqq = 1;
    print Dumper $tree;
}
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$VAR1 = {
          'root' => [
                    "\x{c9}ric"
                  ]
        };
$VAR1 = {
          'root' => [
                    "\x{c9}ric"
                  ]
        };
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It also outputs XML properly (albeit using a weird interface):

#!/usr/bin/perl

use strict;
use warnings;

use Data::Dumper qw( Dumper );
use XML::Simple  qw( );

my $tree = {
          'root' => [
                    "\x{c9}ric"
                  ]
        };

$XML::Simple::PREFERRED_PARSER = 'XML::Parser';

my $xs = XML::Simple->new();
for my $enc (qw( iso-8859-1 UTF-8 )) {
    my $xml = '';
    {
        open(my $fh, ">:encoding($enc)", \$xml) or die;
        $xs->XMLout($tree,
            XMLDecl    => qq{<?xml version="1.0" encoding="$enc"?>},
            KeepRoot   => 1,
            OutputFile => $fh,
        );
        close($fh);
    }
    local $Data::Dumper::Useqq = 1;
    print Dumper $xml;
}
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$VAR1 = "<?xml version=\"1.0\" encoding=\"iso-8859-1\"?>\n<root>\311ri
+c</root>\n";
$VAR1 = "<?xml version=\"1.0\" encoding=\"UTF-8\"?>\n<root>\303\211ric
+</root>\n";
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So if i wanted to send ISO-8859-1 xml i would just add that to the header? Doing this didnt make a difference. Please see

#!/usr/bin/perl
use strict;
use utf8;

# A simple test to show the UTF8 problem
my $parameters;
push (@{ $parameters->{Request} }, {
    URI                    => '/HRM/EmploymentManager/AvailableOpening
+s',
    Action            => 'GET',
    ID                    => '123',
    Parameters => {
                Status                         => 'Test',
            },
});

# convert Perl hash ref into XML    
my $xs = XML::Simple->new();
my $x = $xs->XMLout($parameters, KeepRoot => 0, RootName => 'Requests'
+,XMLDecl => qq{<?xml version="1.0" encoding="iso-8859-1"?>});
print $x;

# convert XML into Perl hash ref
my $xs = XML::Simple->new();
my $XML = $xs->XMLin($x,ForceArray => 0);

# Look at the perl hash ref, there shouldnt be any 
my $temp = $XML->{'Request'}->{'Action'};
my $flag = utf8::is_utf8($temp); 
print "$flag ! $temp\n\n\n";

        
exit;
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No, you removed the encoding. While XML::Simple properly decodes when parsing XML, it doesn't encode when generating XML. (That's a bug. I called it a "weird interface" earlier.)