Are you ready for iXBRL?
IF YOU have either not heard of iXBRL or haven’t a plan to deal with it I would recommend that you read on.
The timing could hardly be worse for under-pressure SMEs but, despite this, implementation is looming.
In a nutshell, HM Revenue & Customs will require corporate tax returns to be submitted electronically from March 31, 2011.
It sounds innocuous enough, but HMRC also requires the data to be electronically tagged using inline XBRL (or iXBRL).
XBRL is a standard for reporting financial data that uses “tags” that computers can interpret.
The “data” means both the financial statements and tax computations that accompany the tax return. All of a sudden it doesn’t sound quite so innocuous.
Accounting and tax software providers have been busily upgrading their packages to support iXBRL.
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If you use one of these don’t take it for granted that it will be compliant. And for those who produce accounts and computations in Word or Excel, these won’t be compliant either.
The go-live date is March 31, 2011. This means that those companies with year ends after March 31, 2010 will be need to comply with the new requirements if they file their tax returns after March 31, 2011. It does, of course, present a window of opportunity that if you can get your tax return in before this date you have effectively deferred implementation by 12 months.
HMRC is allowing some leeway on implantation where they not penalise tagging errors provided that the company can demonstrate that they have taken reasonable efforts steps to comply with the new requirements.
The headline messages for companies are:
n File your tax return before March 31, 2011 to avoid having to use iXBRL;
n If you produce your accounts and tax computations yourself using a software package, make sure that you have a version that supports iXRBL;
n If you produce your accounts and tax computations in Word or Excel you can look at an iXBRL conversion program;
n Remember that you only need to comply with HMRC’s minimum tagging requirements (which HMRC has published);
n If you use an accountant to prepare your accounts and tax return it is worth checking that they will be ready for iXBRL.
If you are doing it yourself or have any doubts about whether or not your accountant will be ready it is worth considering outsourcing conversion to a third party.
iXBRL is something that Ensors is prepared for and if you need further information please contact Malcolm McGready on 01473 220072 or email firstname.lastname@example.org .