iXBRL beds in after first year niggles

A year on from the introduction of mandatory efiling of iXBRL company accounts with Corporation Tax returns, HMRC and software suppliers have been offering feedback on the progress made so far.

In recent briefings, HMRC advised that more than 1m CT600s were filed successfully online by 31 December.

“The quality of XBRL tagging has been in line with expectations and satisfactory. HMRC is already starting to accrue the benefits of tagging. We will continue to work with stakeholders to raise the standard still higher for the second annual cycle,” the department reported in the section on Corporation Tax in its recently published summary of responses to the Digital by Default consultation.

iXBRL dos & don'ts

DO

1. Enter UTRs and company registration numbers in the right formats (no spaces or preceding zeros)

2. Include all the required details, eg directors’ report, directors’ names, balance sheet date.

DON’T

1. Merge accounts and tax computation statements

2. Attach incorrect iXBRL files to CT600, for example, iXBRL accounts iXBRL in Computations section and vice-versa.

3. Include any external links to the Accounts or Computations file.

Source: DataTracks iXBRL Dos and Don’ts whitepaper

To make life easier for companies (and its own systems), HMRC initially adopted a “soft landing” approach where it would not reject returns if they had missing tags. The initial requirement was for accounts to pass 15 very basic iXBRL integrity tests. In time, it plans to move to a Minimum Tagging Standard of around 1,400 items.

There is no relationship between the minimum tagging standard and an HMRC spokesman advised AccountingWEB that there would be no extension to the soft landing. 

The MLS is seen as a starting point from which companies will improve over time, HMRC told software developers. HMRC plans to make improvements to these taxonomies in 2013 to introduce more consistent tagging for detailed profit and loss information. As time goes by and HMRC staff gain more experience with the technology, they will start pulling out items from accounts that have not been properly tagged. Reading between the lines, it could appear that CT filing rejections could go up significantly in 18 months.

In spite of HMRC’s soothing words about iXBRL filing meeting expectations during the first year, data from other sources highlights that while most companies and advisers have coped with the transition, the process is not without its problems.

For example, 14% of the respondents to our TaxCalc-sponsored tax season support survey reported experiencing problems with Corporation tax, and half of those specifically mentioned iXBRL rejections. Most of the issues were resolved satisfactorily, but took up time for accountants and the support teams at HMRC and software developers. And a steady stream of iXBRL queries continue to show up on AccountingWEB’s Any Answers page.

CCH has also surveyed accountants in business and practice about their CT600 filing experiences. More than half of the practitioners (57%) said they experienced some difficulties and 58% said implementing new systems to cope with iXBRL had caused some disruption. Practitioners handle much larger volumes of CT filings, and 84% said they output the iXBRL files from their accounts production; 52% reported that nine out of 10 of their filings were successful first time. But 5% of the practitioners were getting a first-time acceptance rate of less than 5%.

Two-thirds of the accountants in business found iXBRL difficult to implement and 78% complained that it had caused some disruption to their activities.

Both practitioners and business accountants voiced frustrations with the quality of HMRC’s support, for example:

  • “Complete failure by HMRC to provide any assistance when we experienced problems”
  • “Error messages from Government Gateway when accounts are rejected are very vague. Not easy to ascertain what the problem is”
  • “I’ve not yet been able to submit as I cannot resolve an ‘Authentication Failure’ error message. Still working with HMRC Helpdesk”.

It’s always easier to pick up the negative comments rather than positive experiences, and with the momentum behind digital by default, it’s clear that online CT filing is here to stay. Several of the CCH respondents could see the benefits of iXBRL to cut time and costs from submitting returns for both HMRC and companies.

For its part, HMRC is already using the information its collecting from electronic accounts files to profile high risk companies, and new tools are being rolled out that will let compliance staff apply specific risk rules to specific returns. The profusion of tax task forces and amnesty programmes we have seen in the past year are no accident.

But it’s not all Big Brother. Until HMRC hijacked XBRL for its own purposes, the XML-based Business Reporting Language was designed to help financial analysts compare company results. The same possibilities exist for accountants, who could assemble the iXBRL data they have to benchmark their clients or to carry out their own risk analyses of the returns they plan to submit. In tandem with CoreFiling, the company that advised HMRC on the development of iXBRL, AccountingWEB is exploring how the technology could be applied in this way using a web-based validation system to carry out a set of community-derived checks. If you would like to find out more about this project, visit our iXV beta test group.

Comments

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ireallyshouldkn... | | Permalink

The big question for our practice is if they will enable filing of April year ends right away, or if we will be putting paper copies in again for 6 months due to a failure to put the updated CT rates in the system.  That was my biggest annoyance of the whole thing, having invested a lot of time and money in getting iXBRL working for HMRC's benefit, we still had to stick a stamp on an envelope for months on end for post March y/ends.

 

 

Locutus's picture

Couldn't agree more with ireallyshouldknow

Locutus | | Permalink

How idiotic it was that HMRC couldn't update their system until October 2011. The tax office I sent a paper return to sent it back with a 'file it online after October' letter.

nogammonsinanundoubledgame's picture

I

nogammonsinanun... | | Permalink

sort of see the problem.  If the finance act doesn't receive royal ascent until mid-july, before which time anything can happen, is there any point in investing masses of resources programming the system beforehand?  Bear in mind that just to change a tickbox on an online form costs the taxpayer £400k, so I am informed in a local working together meeting.

For me, the last year's experience with iXBRL has been that 8 out of 10 go though fine on the click of a mouse button, and the remaining 2 out of 10 take about 2 hours each.  We even out the charges so that the smooth ones subsidise the problem cases, but it is not really fair.

With kind regards

Clint Westwood

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ireallyshouldkn... | | Permalink

Clint - the royal ascent excuse is a red herring. We can happily file VAT returns with the new rules from day one. When on-line filing came in you could file without any problems for the whole year, it was only when the chancellor made late changes to the £10,000 band that it got put back to October and its stuck there ever since regardless of what changes are or are not in the system.

We filed a big stack of paper returns, only one came back and that was one without a tax liability which I understand we could have filed on-line.

nogammonsinanundoubledgame's picture

There is a small error I think ...

nogammonsinanun... | | Permalink

... in the first of the list of "Do"s in the framed box in the OP, where it states that you should not include any leading zeros in the Coy Reg number.  In my experience you must enter an 8 digit Coy Reg number, and if the actual reg number is fewer than 8 digits long you must make it up to 8 by inserting leading zeros.

With kind regards

 

Clint Westwood

GaryMc's picture

Enabling of rates

GaryMc | | Permalink

HMRC put out an announcement today regarding rate updates.

Only companies paying the main rate or with marginal relief cannot file from 1 April but HMRC are updating in July this year rather than October.  Companies paying small co rate or loss making can file from 1 April.

Correction on the registration number - the spaces or zeroes advice is if you are using HMRC software.  If you are using 3rd party software, you need to ensure that the number on the CT600 and the number of the accounts is the same.  For example, if there are seven numbers and one is a leading zero on the accounts then the same number must appear on the form.

 

Tonykelly's picture

leading zero

Tonykelly | | Permalink

nogammonsinanundoubledgame wrote:

... in the first of the list of "Do"s in the framed box in the OP, where it states that you should not include any leading zeros in the Coy Reg number.  In my experience you must enter an 8 digit Coy Reg number, and if the actual reg number is fewer than 8 digits long you must make it up to 8 by inserting leading zeros.

With kind regards

 

Clint Westwood

The company reg no should be the same on the CT600 and accounts. If you put a leading zero in the accounts, you put a leading zero on the return, and veechay versing.

 

mr. mischief's picture

lucky so far

mr. mischief | | Permalink

I use VT and have filed 40 returns so far with no problems on any of them.  The whole October business was just a joke and highlights - as if it were needed - just how remote the HMRC mentality is from the rest of UK buinsess.

The benchmarking sounds useful, will take a look.