TT151: Online Filing of Corporation Tax Documents

May 27, 2010

When filing a corporation tax return (CT600) with HM Revenue & Customs (HMRC) companies are also required to file a corporation tax computation and a copy of the accounts that the tax computations are based on.

From 1 April 2011 HMRC require all of these documents, regardless of the companies’ year end, to be filed electronically using a format called “inline eXtensible Business Reporting Language” (iXBRL).

What is iXBRL

It is a method of translating financial information into an electronic format.

Each item within the relevant financial information is given an internationally recognised tag.

From all of these tags an html document (ie a web page) is produced that appears exactly like a hard copy of the document.

The web page can be processed so that databases can be populated with the information contained within it. This will enable efficiency savings on data processors and enable easier analysis of the data.

Government agencies are driving this process forward, HMRC have the above deadlines and Companies House’s have a project to adopt online filing of accounts, no timetable has been set yet, but we anticipate that this is not too far away.

How to produce iXBRL information

There are several ways to produce the financial information in iXBRL format, the two which are going to be most common are:

The accounts production software has pre-tagged fields and the trial balance guides the correct figures to the correct tags, or

A conversion tool can be used, this will need the user to individually assign tags to the correct field throughout the accounts. The scale of this task is shown by the fact that over 5,000 different tags are defined for use in the preparation of accounts.

We believe that the use of conversion tools on Excel and Word documents will be time consuming and fraught with the potential for errors.

At Barnes Roffe our software suppliers for both accounts production and corporation tax compliance are updating their products to contain pre tagged fields. We expect to be able to file the information in the required format well ahead of the 1 April 2011 deadline.

What are the issues with iXBRL

Most accounts and corporation tax software’s are not currently able to prepare these documents. Compliant software is not yet available and is unlikely to be until September 2010.

Companies have a year after their year end to file the documents with HMRC. If a company wants their 30 April 2010 tax computations and accounts filed at the end of the one year filing deadline then they will be in this regime and compliant software will need to be used. This leaves a decision to be made to file the documents early or delay the preparation of the documents until compliant software is available. Neither of which are ideal solutions.

Barnes Roffe LLP will be in touch with their clients to discuss how the new filing regime affects them. If you have an urgent query regarding this issue please contact your Barnes Roffe contact partner.

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