HMRC has confirmed it will reject any company accounts or tax computations submitted in non-iXBRL format from 1 November 2017 unless a specific exception applies
Since 2011, it has been obligatory to file all company tax returns online using Extensible Business Reporting Language (XBRL) tags for accounts and tax computations. While the vast majority of returns that HMRC receives are in the correct format, a significant number are still not.
From 1 November 2017, HMRC will reject all returns with accounts or tax computations that are not in inline Extensible Business Reporting Language (iXBRL) format unless the directions under SI 2003/282 allow otherwise or a dispensation by HMRC has been granted. SI 2003/282 details approved methods for sending corporation tax information online and paying electronically.
HMRC will ask companies to re-file them in iXBRL, and if a return is not re-filed by the normal filing date, companies run the risk of a late filing penalty. HMRC is requesting companies do not include a covering letter or duplicate information in PDF that is already in the iXBRL documents. However, it is important that where there is additional information to be submitted, for example a loss carry-back claim, it is sent as a PDF attachment.
The switch to iXBRL was one of the first modernisation projects undertaken by HMRC and initially proved a difficult shift for some firms, which experienced high failure rates and accuracy issues, while others felt it was simply another hoop to jump through.
In 2012, a year after its implementation, a CCH Daily survey of accountants showed that 86% found the system disruptive to the practice and its clients, with more than half (57%) reporting implementation difficulties.
Emma Rawson, technical officer at the Association of Taxation Technicians, said: ‘It is interesting that HMRC have left it so long before taking this step. iXBRL was introduced over six years in April 2011. It has not been made clear what role iXBRL will play when Making Tax Digital is introduced for corporation tax. Some were hoping that iXBRL requirements would be dropped, but could this indicate that is not the case?
‘Companies should be recommended to submit their next corporation tax returns as early as possible – if they leave it until near the filing deadline and the return is rejected due to iXBRL deficiencies this could expose them to late filing penalties.’
Information on using XBRL and the Corporation Tax online filing and electronic payment is here.
Agent Update 62, which details the changes, is here.
