Published 29 July 2011
Since 1 April 2011, the vast majority of companies are required to file corporation tax returns and related financial statements electronically with HM Revenue & Customs using iXBRL – Inline eXtensible Business Reporting Language. However, many companies have yet to tag their financial statements.
Electronic filing requirements apply to virtually all companies, unincorporated bodies, clubs, etc. for accounting periods ended after 31 March 2010. This is regardless of whether the entity prepares financial statements under UK or international financial reporting standards.
Completing the iXBRL tagging can be challenging. It requires the right software capability, the tagger to have considerable knowledge and expertise and to be familiar with HMRC’s submission rules to ensure a tagged file will pass through the HMRC gateway.
Penalties can apply for failure to submit a correctly tagged set of financial statements or tax computation. However, HMRC has said it will apply a “soft landing” approach for the first two years of electronic filing and penalties should only be levied where there has been no real attempt by the taxpayer to tag a document correctly.
Looking ahead, iXBRL could increase HMRC’s ability to interrogate the data it receives – to compare company returns within a sector to identify possible anomalies. Furthermore, Companies House is expected to require iXBRL filing of financial statements from some point in 2014.
For more information about how Moore Stephens can help please contact us.