21 July 2010
There is a natural and understandable tendency to put off dealing with irritating red tape until the last minute. But procrastinating on something that requires a technology solution, like efiling Corpration Tax returns, just won’t work.
Next year any company filing a CT600 relating to a financial year that ends after 31 March 2010 will have to submit the form electronically, accompanied by a set of accounts and tax computations both tagged in the inline eXtensible Business Reporting Language (iXBRL).
HMRC’s decision to impose this format on business taxpayers is probably its most significant technical change since the introduction of Self Assessment in 1997. It means that those who prepare their accounts using tools such as Microsoft Word or Excel – nearly half the market, according to several vendor studies – will need to find some way to convert their accounts into iXBRL.
So organisations subject to CT need to make sure they’re equipped for compulsory efiling before the end of their current financial years. For practitioners who prepare multiple companies’ accounts for tax purposes, the efiling deadline is likely to prompt a move to more automated systems. If you have not already done so, it is probably time to get yourself some tax/accounts software now, checking along the way not just that it suits your budget and way of working, but that the supplier will be able to support CT600 filing with both iXBRL accounts and computations by next April.
The culture shock of iXBRL is worse for in-house accountants, who only deal with either one or a small handful of final accounts each year. HMRC’s decision to make online filing compulsory has been put into action much quicker than similar moves with PAYE and VAT and many company accountants have been caught on the hop. The options here are: use the accounts and computations templates that come with HMRC’s free online submission system (designed for smaller organisations with simple tax affairs); find a tool that can tag up and output an iXBRL file of the accounts they produce; ask their accountant to take care of it; or outsource the task to a specialist service.
HMRC has done a lot to work with software vendors and practitioners to educate market and has published copious guidance on its CT website (see box, right). HMRC “recognises” applications that have passed its tests for submitting iXBRL accounts and divides them into the following categories:
- Produce and file CT600 returns
- Managed services
- Software conversion tools
- Integrated tax/accounts programs that support iXBRL
For the rest of this article go here.
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