ICAEW The use of iXBRL in tax and the new corporation tax filing rules Anita Monteith Technical Manager, Tax Faculty.

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The use of iXBRL in tax and the new corporation tax filing rules

Anita MonteithTechnical Manager, Tax Faculty

ICAEW

ICAEW

The birth and growth of mandatory e-filing

The beginning……March 2006, Lord Carter of Coles, Review of HMRC

Online Services– Income tax self assessment filing date – Payroll– VAT– Corporation tax

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2012

• Olympics

• Date by which HMRC should aim for all business, and all IT literate individuals, to be filing returns online

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What will be required?

• Online filing for all corporation tax (CT) returns and electronic payment of corporation tax – CT600 corporate return– Computations*– Accounts*

• Filing of * must use the ‘inline extensible business reporting language’ (iXBRL)

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Exactly when from?

• For accounting periods ending after 31 March 2010, and

• the return is delivered after 31 March 2011– eg Festive Ltd prepares its accounts for the year ended

30 June 2010, its CT return will be due by 30 June 2011

• Could file early and gain an extra year to plan?

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Which companies?

• All companies, associations and clubs which must file CT returns

• Unincorporated bodies such as clubs, associations and some charities may attach accounts as a PDF

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Charities - overview

• Most charities do not pay corporation tax and so do not have to file a CT600 tax return

• A charity which does need to file a CT return may be able to use the free HMRC product

• But, unincorporated charities do not need to file iXBRL accounts

(a PDF will do)

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How do you know what to tag?

 Taxonomy  Full List  Minimum Tagging List

UK GAAP 5,292 1,253

UK IFRS 3,725 1,629

UK IFRS banking extension

717 N/A

Corporation Tax Computational

4,561 1,360

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Mandation? Deferral?

• Legislation for iXBRL laid on 7 December

• Software products under construction. In spring we will review this market

• Cost/benefit of iXBRL?• HMRC must minimise the admin burden

(eradicate if possible?) • Soft landing important

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What should you do next?

• How do you file now? Who does what?• Register to e-file to be ready• Who will do what?• Possibilities?– Free HMRC Adobe product– Proprietary software

– Tax software– Accounts production package?

– Accounts in word, excel, or on paper?

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Free HMRC products

• The ‘free filing’ debate

• EzGov, the company which provided the former online filing service for CT. Allowed electronic submission of: – A basic version of the CT600.– Some supplementary pages.– PDF attachments for accounts, computations and other

supporting information.

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New HMRC free filing product

• A downloadable PDF, which covers the form CT600 Company – Short Tax Return and the following supplementary pages: – CT600A (Loans to participators by close companies) – CT600E (Charities and Community Amateur Sports

Clubs) – CT600J (Disclosure of tax avoidance schemes)

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What else does it do?

• It also includes accounts and computations templates

• Q&A based• Not all information is compulsory• Asked for some information more than once• Print out of hard copy lengthy

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The soft landing

• A two- year period during which anyone who has tried to comply, but failed, will not be penalised.

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Paying Corporation Tax electronically

• With effect from 1 April 2011 will mean– Paying by direct debit– Paying by internet, telephone banking or BACS direct

credit– Paying by debit or credit card over the internet: Billpay– Paying by CHAPS transfer– Paying by bank giro– Paying at the Post Office

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