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iXBRL filing: What happens next?
Consultant practice editor Mark Lee recently took part in an accountancy and compliance roundtable with IRIS that covered some of the issues that practices will have to face under the new filing requirements.
The challenge posed by the iXBRL filing requirements for accounts and computations accompanying Corporation Tax returns from April 2011 has forced many practitioners to review their software needs.
The whole point of tax and practice software is to eliminate drudgery so staff can get more done within the existing salary base, and focus more on value added and advisory services.
Who bears the costs?
As software evolves to meet new legislative requirements, users assume this will be built into the price. Software users are likely to be unwilling to pay extra for updates that they need to comply with legal obligations. Suppliers will have a hard job on their hands to persuade existing users to pay extra. In practice the development costs will have to be recovered from new users – those who are computerizing for the first time and those who migrate away from competitors.
In the same way, few accountants will successfully persuade clients to pay a surcharge to cover the costs of introducing new software. Some firms tried that in 1997 when self assessment was introduced. In most cases clients rebelled and accountants had to absorb the cost of introducing new software. This time round it is likely to be the software suppliers who bear the costs.
What about additional work?
Clients will only agree to pay additional fees if they perceive that additional work is being done for their benefit.
To ensure they can manage clients’ expectations, accountants need to ensure they understand what is going to be involved to add iXBRL tags to accounts for filing CT600s and final accounts in 2011.
From a commercial perspective, you should only devote time and effort to tagging if you are sure you will be paid for doing so. Asking for additional fees after the event is unlikely to be very remunerative.
Mark Lee is Consultant Practice Editor for AccountingWeb and Chairman of the Tax Advice Network.