As part of a training exercise I had the interesting experience of using the HMRC on-line corporation tax service yesterday, and guess what? They haven't updated the small companies rate on their pdf document from 21% to 20% for the 2011 Financial Year yet. I thought it must have been an error by me at first, but this is generated by their own systems after the computations and CT600 entries have been inputted. I searched to see if anyone else had spotted this error already and found the following query on a DIY accounting forum:
Apparently they want everyone to wait until October before using their system for 2011 year ends.
But what about the tax returns already filed using the HMRC system? Presumably they are sending out tax bills with the wrong amount. Presumably we have to write and tell them. Will they be giving refunds to those who don't spot this error, I wonder?
Isn't it wonderful that they force every tiny company in the company to file their tax returns electronically and then can't even be bothered to get the tax rates right on their own systems. I know the reduction to 20% was not known before the Budget but it's been 4 months since then - you'd think they'd have changed it by now. Maybe they are waiting for the Finance Act to receive Royal Assent.
Has anyone else experienced this problem yet? Obviously it's not an issue if you use your own software but there must be thousands of small companies using the HMRC system. What are they meant to do about this?
Chris
Replies (17)
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Known problem
This is a known problem. See this thread https://www.accountingweb.co.uk/topic/tax/ct-efiling-delay-another-january-october/505584
I can understand HMRC having to wait for the Finance Bill to receive Royal Asset but as that's usually by 5 August each year, I don't understand why we have to wait until October for them to process the changes.
paper file
You can still file them manually if you print them off from your accounts prep software.
Saves mucking about with iXBRL which is an added bonus too.
If they are for accounting periods after 31 March 2011
isn't online & iXBRL filing compulsary?
Hadn't spotted this!
I have a few 2011 returns with clients having already prepped them on PTP. How bizarre!
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iXBRL is in theory compulsory, BUT if you accouting period goes into April 2011 they will accept paper copies until the point at which the computer bods get of their lasy backsides and spend a whole half hour making a simple adjustment to the software.
alreay filed a dozen Ltd company returns this way.
If HMRC want to be grossly inefficient then its fine by me.
So the reality is if your accouting period is before 31st March, then you must iXBRL
But if you its April onwards you can still file the old way. I only have a handfull of pre-March returns left now, so I can forget about iXBRL for another 3 months by the look of it which is a bit of a bonus.
Quite frankly I think everyone should be sending in as many paper copies as humanly possible to make the point that its just not good enough.
Pathetic excuse
I absolutely agree that the Royal Assent excuse is indeed pathetic. HMRC are accepting paper returns with a 20% tax rate, so if they're happy to accept them manually, why can't they accept them electronically? It doesn't take nearly six months to make such a minor change to their online computer systems, and after all, it must already be changed in their demand software as the CT demands for post 1/4/11 year ends submitted on paper are coming through fine with the 20% rate. At the end of the day, it's just another online foul up. Again, it seems they have committed themselves to a very small number of major updates to their online systems which means loooooonnnng waits for changes to be implemented. It's funny how most other organisations can be far more responsive and update their systems far quicker. It really is time that HMRC sacked their "IT director" and "IT partners" and gave the work to a decent firm who know what they're doing.
Perfectly put Ken
It is daft in this post-Carter era we are in. If we have to jump through hoops for iXBRL although we weren't ready and my Sage doesn't present a detailed tagged P&L, they've gone backwards. So if we can get our act together, why can't hmrc do the same?
Detailed P&L
It is not just Sage, but every accounts software package, that does not submit a tagged Detailed P&L. It is because HMRC said they did not want it, despite it being essential to make sense of the disallowances in the tax computation. It must also be one of the easiest documents for software packages to tag automatically because it is little more than a list of the balances on the nominal ledger income and expenditure accounts.
@Euan - interesting stuff, thanks.
iXBRL introduction is then definitely a backwards step! Way back 20 years ago when I was training, even though I believe a detailed P&L was not compulsary, I was always told to provide one. Avoid giving HMRC a reason to enquire. Give them the info they need to make an informed decision, but not so much info to give them ammunition to shoot you with. This is a principle I have applied since.
So really I cannot see what use iXBRL tagging is in its current format. Interesting as thought it was just Sage, so now I am even more convicned that HMRC forcing iXBRL on us is (at the moment at least) a waste of time and resources.
Paper CT600
A few weeks ago I posted a 30 April 2011 CT600 with accounts and computations the old fashioned way, due to it being impossible to file via the 'wonderful' iXBRL system.
I've not heard anything yet but will let you all know if it is accepted or rejected in due course.
Had this with IRIS yesterday
Tried to create a CT600 for a 30 April year end. Got a validation error saying that appeared to say I had filled in the tax rates incorrectly. Having determined that none of that appears to be manually adjustable I phoned the IRIS helpline who clued me in on the issue. Given that all of the tax rates are handled by IRIS automatically, would it be too much to ask for a more helpful error message in these circumstances.
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Post March returns are being accepted on paper.
As I say we have sent a significant number of them, and they appear on the clients online record.
Quite frankly the only way to get HMRC to get this update completed quickly and on time every year (which would save everyone a lot of time and effort) is to flood them in paper. Eventually someone somewhere will wake up to the fact that tens of thousands of paper CT returns takes a heck of a long time to process, and wouldnt it be a huge efficiency saving to process them online using the expensive software we have installed.
The institutes dont seem to be interested.
Software companies dont seem to be interested
I know working together have raised it, but they are generally ignored.
HMRC will accept
@0103953
HMRC will accept the paper return and accounts. We've submitted loads. They havn't a leg to stand on not to accept them when their own systems won't work. I agree with the other poster - if everyone submits on paper then they'll sooner or later realise how stupid they're being and have sort it out. It's not as if it's just a blip this year. It happens every year when there is a change in CT rates. It's been particularly stupid this year co-inciding with the XBRL stupidity which basically gives us all an excuse not to bother with XBRL. Think about it - get your accounts done soon enough and get them submitted before Autumn, and we don't have to worry about XBRL at all - we just carry on filing on paper!
Paper return rejected
HMRC (Euston) sent back my paper CT600 for the year ended 30 April 2011.
Letter starts with apologies and blurb about having to wait for the Finance Bill to receive Royal Assent.
Letter continues ".... It is appreciated that there may be some Companies which have to file early - mainly cessation cases and a provision has been made for these few cases. All other Companies will have to until after the update in October 2011, as stated in the News Release" For this reason, I am unable to accept the paper version of your Return and Accounts and I am returning them so that they can be re-submitted electronically when then update has taken place."
Great! Has anyone actually got their paper CT600s accepted for accounting periods ending after 1 April 2011?