Introduction to iXBRL
It is now compulsory for most companies to submit their company tax return, computation and accounts online to HMRC in iXBRL format.
It is no longer be acceptable for most companies to submit accounts to HMRC on paper or as a PDF attachment. This will be a significant issue for many organisations and will undoubtedly place more burden on finance teams and increase costs.
haysmacintyre can help organisations, who have not yet dealt with the iXBRL issue, to change the way they prepare their accounts so they are compliant with the new rules.
What is iXBRL
iXBRL, or inline eXtensible Business Reporting Language, is an electronic format that involves the application of computer-readable tags to the data in the financial statements. This will enable HMRC to process data automatically and more efficiently.
The new rules apply to virtually all companies which currently submit a corporate tax return, meaning companies need to review their systems to ensure they can produce the required iXBRL files.
Does it impact my business?
The impact will be most strongly felt by the many companies who prepare their accounts using Word or Excel. Neither of these two formats are iXBRL compliant and therefore these companies need to make changes to their current processes. The new requirements are effective for accounting periods ending after 31 March 2010.
Those companies who outsource their accounts preparation need to ensure that their accountants are using iXBRL compliant software.
HMRC has said that if organisations are unable to submit both corporation tax returns and company accounts in the prescribed format, it will reject the submission, and offenders will be treated as having not filed their returns at all. This could mean penalties and pressure from the authorities to comply.
What data is tagged?
An “average” set of accounts will use approximately 400 different tags. Most of the numbers and some of the text in a set of accounts will be tagged. The data must be tagged using a software tool, either full accounts preparation software or a conversion and tagging tool. Companies have the option to purchase the required software and manually tag their data or outsource the work.
In-house or outsource?
The tagging process inevitably involves time and effort and requires significant experience of both financial statements and HMRC taxonomies. In-house finance teams will require training and keeping their skills and knowledge up-to-date every year will be a challenge. Because of the potential penalties from HMRC it is important that the tagging is performed correctly to avoid errors being made. For most companies it will not be possible or practical to do this in-house and therefore to reduce the burden, many companies are choosing to outsource the work.
haysmacintyre solutions
haysmacintyre are offering two solutions:
1) Production of financial statements using our iXBRL software
2) Conversion of Word or Excel financial statements into iXBRL
With both services we use our qualified staff based in our London office. We do not outsource this work to other organisations ensuring that we can deliver a highly professional and accurate service. We appreciate that companies will look to minimise the cost of this change and because of the systems we use in-house we are able to offer these services without a hefty price tag.
As with all services provided by haysmacintyre you will receive the highest level of personal care and attention. We are offering a managed and professional service at value-for-money rates.
Next step
If you would like to discuss your iXBRL requirement with us then please contact David Cox (Partner) who heads up the haysmacintyre iXBRL “taskforce”. Alternatively please click on “Get a quote” and complete the form. We will be pleased to give you a no-obligation quote.