iXBRL Filing Of Company Tax Returns And Accounts - Income Tax

Mandatory tagging of corporation tax computations and accounts using iXBRL is fast approaching. Will you be compliant?

What is iXBRL?

From 1 April 2011 all company tax returns must be filed electronically with HM Revenue & Customs (HMRC) for accounting periods ending on or after 1 April 2010. The following documents to support the tax return must be filed electronically using 'Inline Extensible Business Reporting Language' or 'iXBRL':

Corporation tax computation; and
Financial statements (statutory accounts).

Any other supporting documents can, as now, be filed using PDF.

The requirement to file electronically does not cover amendments to company tax returns.

'Tagging' using iXBRL means that certain figures and narrative in the tax computation and statutory accounts are given a computer-readable identity.

This is invisible to somebody reading the document on screen or on paper, but the tags are visible to HMRC's computer system. HMRC may use the tags to improve their processing of returns, risk assessment (e.g. easily identifying anomalous figures) and for other reasons.

Corporation tax computations

If Smith & Williamson prepares your company tax return and supporting tax computations, we will tag these for you, so they will be fully iXBRL compliant before the 1 April 2011 deadline and you need not take any further action.

However, if you prepare and submit your own tax computation and ask Smith & Williamson to review it, you will need to consider how you are going to apply iXBRL tags to your computation before it is submitted to HMRC. You can:

Ask us to prepare your tax computations in the future;
Ask us to input your own tax computations into our own software, which we can then tag for you;
Consider using the facility provided on the HMRC website to submit the return, which is aimed at small companies with simple tax affairs; or
Make your own arrangements to produce iXBRL-compliant computations. The two main ways to achieve this are either to use a firm that specialises in tagging computations, or to purchase software to enable you to tag your computations yourself. HMRC maintains a list of companies that have developed software products and/ or can provide a tagging service. These companies have passed tests prepared by HMRC and therefore comply with the requirements of iXBRL. We have been in contact with a couple of these firms and also with a couple of other firms that have contacted us offering the iXBRL tagging service. Details of these firms can be found at www.smith.williamson.co.uk/ixbrltagging .

Please let your usual Smith & Williamson contact know how you would like to proceed.

Statutory accounts

How your statutory accounts are tagged when iXBRL becomes mandatory will depend on who prepares them. Smith & Williamson will need to either prepare, or be provided with, iXBRL-compliant accounts to submit with the tax return each year.

Please consider the options below and, if required, let your usual Smith & Williamson contact know how you would like to proceed.

Smith & Williamson prepares your statutory accounts from records provided by you

If your company's statutory accounts are already prepared using the accounts production software used by Smith & Williamson, then your accounts will be fully iXBRL compliant before the 1 April 2011 deadline and you need not take any further action.

If we prepare your accounts using Microsoft Word, for example, where you require certain non-standard formatting to be applied to your accounts, then you can either:

Ask us to produce your accounts using our accounts production software in the future; or
Make your own arrangements to produce iXBRL-compliant accounts. The two main ways to achieve this are either to use a firm that specialises in tagging accounts, or to purchase software to enable you to tag your accounts yourself. HMRC maintains a list of companies that have developed software products and/ or can provide a tagging service. These companies have passed tests prepared by HMRC and therefore comply with the requirements of iXBRL. We have been in contact with a couple of these firms and also with a couple of other firms that have contacted us offering the iXBRL tagging service. Details of these firms can be found at www.smith.williamson.co.uk/ixbrltagging .

Where we have an accounts production software template that is appropriate for your company's sector, the first option is available. This should be the case for most companies. It should be noted, however, that the formatting and disclosures in your accounts may change from that currently used. Your usual Smith & Williamson contact will be able to discuss with you whether this option is available.

You prepare your own statutory accounts

If you prepare your own accounts, for example providing us with accounts in Microsoft Word, PDF or another format, you need to do one of the following:

Ask us whether we are able to prepare your accounts in future. Please note that we may not be able to do this for certain audit clients due to regulatory requirements; or
Make your own arrangements to produce iXBRL-compliant accounts. The two main ways to achieve this are either to use a firm that specialises in tagging accounts, or to purchase software to enable you to tag your accounts yourself. HMRC maintains a list of companies that have developed software products and/ or can provide a tagging service. These companies have passed tests prepared by HMRC and therefore comply with the requirements of iXBRL. We have been in contact with a couple of these firms and also with a couple of other firms that have contacted us offering the iXBRL tagging service. Details of these firms can be found at www.smith.williamson.co.uk/ixbrltagging .

Another firm prepares your statutory accounts

If another firm prepares your accounts, they may be able to tag these for you. Please contact them to find out their plans for iXBRL mandation and, if they will provide this service for you, ask them to provide us with iXBRL-compliant accounts on an annual basis.

If you would prefer us to speak with the other firm direct, please let us know. If the other firm cannot tag your accounts for you, you will need to make alternative arrangements to provide us with iXBRLcompliant accounts.

You can either use a firm that specialises in tagging accounts, or purchase software to enable you to tag your accounts yourself. HMRC maintains a list of companies that have developed software products and/ or can provide a tagging service. These companies have passed tests prepared by HMRC and therefore comply with the requirements of iXBRL.

We have been in contact with a couple of these firms and also with a couple of other firms that have contacted us offering the iXBRL tagging service. Details of these firms can be found at www.smith.williamson.co.uk/ixbrl-tagging

Companies House requirements

Companies House does not currently require companies to file their accounts electronically. However, they have announced that they expect to mandate electronic filing from March 2013. It remains to be seen whether iXBRL tagging will be required to comply with their filing requirements at that time.

Please Note

We have taken care to ensure the accuracy of this publication, which is based on material in the public domain at the time of issue. However, the publication is written in general terms for information purposes only and in no way constitutes specific advice.

You are strongly recommended to seek specific advice before taking any action in relation to the matters referred to in this publication. No responsibility can be taken for any errors contained in the publication or for any loss arising from action taken or refrained from on the basis of this publication or its contents.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.