Is Your Company Ready?

From 1 April 2011, for accounting periods ending after 31 March 2010, company tax returns must be filed online with HM Revenue & Customs (HMRC). This will use a new format for accounts and computations known as iXBRL.  As part of HMRC’s streamlining and moving all document submission to an online format these changes are now to be introduced to affect limited companies.

Is your company ready for HM Revenue and Customs filing changes?

Once a year your corporation tax computation and company tax return is submitted to HMRC together with a full copy of your accounts.  Using the new format will mean that these documents will have to be prepared in a way that HMRC’s software can read.  

Unfortunately this will not be a simple case of preparing the documents with a new type of software for submission but will entail a much more detailed and technical approach to the filing process.  As part of this process you will have to identify certain entries on your accounts and tax return to be coded in a certain way for the submission to be accepted.  This process will be known as “tagging”.

HMRC have issued a list of 1200 potential tags that will need to be made where the information is relevant to the company before filing.  This list is referred to as “the minimum list” as HMRC are moving towards a more comprehensive one in a few years time which will include up to 4500 items.  In most cases you will need access to specialist software to carry out this procedure using iXBRL.  A very few simplified cases will be able to use PDF’s.