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In a move aimed at reducing businesses' administrative burdens, Companies House is to accept accounts in Inline XBRL (iXBRL), the same format in which all company tax returns (CTRs) will have be submitted online to HMRC from April 2011.
Companies House says it will introduce its iXBRL service for unaudited full accounts by next summer and will then continue to develop its capability for all the main types of accounts.
The taxman's new iXBRL service for CTRs is scheduled to be available from November 2009. The Chartered Institute of Taxation recently expressed its doubts about the forthcoming system, saying it may well be 'costly and problematic' for businesses and their tax advisers.
Mark Holden, who oversees enhancements to the Revenue's online services, said that Companies House's lannouncement was 'an important step towards our goal of offering a joint filing facility for company accounts and company tax returns, as recommended by Lord Carter’s review of HMRC’s online services'.
An HMRC leaflet is now available explaining how, after 31 March 2011, corporation tax returns must be filed online in iXBRL. Companies will be able to file online either through commercially available software or by using the taxman's software, which will be aimed at businesses with less complex tax affairs.
As the leaflet points out, there is no need for companies to re-engineer their accounting processes to comply with the requirement to file online using iXBRL, as their software will do this for them.
HMRC are hoping to release their corporation tax filing software towards the end of this year. It is also expected that a number of commercial products will be available to support the iXBRL standard from November 2009.
XBRL (an initialism of eXtensible Business Reporting Language) is a computer-readable format for financial data. It works by putting a tag on each piece of electronic data (text or numbers) within a document.
Inline XBRL (iXBRL) makes XBRL readable by humans and guarantees that the layout and presentation of information looks the same for both the author and the person receiving it, whether it is being viewed online or as a printout.
According to the Revenue, XBRL provides major benefits in the preparation, analysis, re-presentation and communication of business information. It also offers cost savings through greater efficiency, improved accuracy and reliability to all those involved in supplying or using financial data.
Long term, these are expected to far outweigh any initial development/set-up costs, say HMRC.
