Happy iXBRL day!

What happens after the soft landing is over?

How exact will the tagging have to be? Will HMRC reject returns and accounts if one or more of the tags are done incorrectly? How pedantic will they be?

Shouldn't that be "digital by Diktat"?

Its not the fittest or fastest, but the most adaptable to change that survive...

... and not Companies House as well?

If so, won't we need to do everything twice? Seems like a right pain.

As someone who is trying to use the CCH software,I can only say it is riddled with problems out of 5 ct returns I have tried to file online with accounts last week, all have had to be reffered back to customer support ,1 has finally been filed suceesfully,the rest are back with support.Once you iron out the tagging problems another error or 6 seems to appear.

It is a nightmare.

I was over-pessimistic when I told John I expected to hear from Sage at 5pm on 31 March - the email had actually been in my Inbox since 10.30am!

Back in the office today there was a CT600 in the post so I gave it to my assistant to file using the newly update Sage SAPA software. This generated an iXBRL tagging error that needed a call to Sage support. Looks like they have thrown some money at this as the phone was answered instantly and we quickly had a fix. There seem to be a few glitches in the iXBRL file generation at the moment, but now we know what the issue is we should be able to fix these as we go. The main issue is where we have moved away from the default Reportpad text so the software doesn't know how to apply the relevant tags - easy to fix when you know this. Perversely, SAPA generates the accounts as a .htm file, but you have to rename it as .html before you can file it!

As expected, apart from this filing the iXBRL accounts was just a matter of inserting the accounts file in Digita Corporation Tax and pressing a button. It has to be said that a good previous record of filing CT600s online with pdf attachments meant that there was little more to learn. Training my team to do this took all of 10 seconds! The CT600, comps and accounts sailed though the HMRC gateway without a problem.

Sorted.

I've been a bit of an ostrich about this but I only deal with a few company accounts and have previously filed them using the HMRC free software (basically as PDF attachments). I am hoping HMRC have developed some free software for us small guys to file with???

A few weeks ago I used the HMRC option - a downloadable .pdf, a bit of a learning curve, a few workarounds for defects in the HMRC software, but it worked with perserverance.  No guarantee that 3rd party software will be trouble-free from what I've seen on Aweb, so if I'm going to have a learning curve experience might as well NOT pay a software providor for the privilege.

The process is as follows:-

1. Register client with yourself for online services
2. Once registered go to your HMRC services > Corporation Tax > List of clients
3. Select the client concerned > file a return
4. Adobe Acrobat reader may need updating and "trust status" settings changed (a bit of a bind, but apparantly necessary) - HMRC website will prompt you on this and provide instructions
5. Start filling in the downloaded .pdf - it gives an option to file the accounts with Companies House at the same time, don't trust this, so I don't tick this option (already filed online anyway with Co's House).
6. There are three sections to the .pdf:  Accounts (simply copy the figures from your Excel produced accounts), then Tax Comps (again simply copy the figures from your Excel comps), and finally the CT600. 
7. Feel happy at not having paid one or more 3rd party software providors an annual (yes they like to effectively rent you the software nowadays rather than sell you it for a one-off fee) software fee (spending time using HMRC's product has earned you maybe £100 or more per hour / saved £100 in software fees for an hour or less work). 

The above is, for me, definitely the way forward having a small number of limited companies.

This could not in any sense be regarded as a Happy Day for the profession.  At a time of deep economic uncertainty, we are again having to invest substantial amounts of non chargeable time in bending to the wishes of the HMRC on a system which is complex and flawed.  The more sensible approach would have been a documented year's run in period, instead of this absurd grudging two year 'bedding in' when you may or may not not be penalised.

I've used HMRC's online corporation tax software on a trial run and it failed on the first attempt.

As mentioned the system is split into three parts:

The accounts part worked but the accounts looked awful because there was insufficient room for the required disclosures (FRSSE), so alot of information was missing, cut off mid sentence. This is probably good enough to get passed Companies House as they only check the signature and disclosure on the balance sheet.

The corporation tax return worked but not in conjunction with the computation, which was far too rigid. There was no facility to calculate or even report chargeable gains/losses and I happened to have a company that made a chargeable loss.

HMRC software will work for most small businesses but because iXBRL is mandatory, HMRC's system should be able to handle all eventualities, which it can't, so HMRC's software is not good enough. The process took roughly three to four hours, when previously filling out a CT600 with a corporation tax computation took about 20-30 minutes (being generous).

If online filing was the way forward then it wouldn't need to be mandatory as people would adopt it willingly. 

However, the problems facing the accounting profession are far worse than just iXBRL.

I genuinely feel that clients are better off with unregulated accountants who aren't bothered by disclosures or anti-money laundering regulations, neither of which benefit the client and are only properly enforced by accounting bodies, who charge fees and require additional costs such as insurance and CPD, both of which I support. However, these costs have to be passed onto clients, borne by the accountant or probably a mixture of the both.

From the client's point of view it's a choice between a chartered firm with higher accountancy charges or finding a good unregulated accountant, who could easily cut regulatory corners and do the job for much better value, or the third option of an unregulated accountant who could offer lower tax bills through tax evasion, as well as lower fees. The latter choice comes with a risk they could get caught and have to pay penalties.

However, entreprenuers are risk takers and are likely to favour their odds against a regulator like HMRC, who are probably less effective at spotting tax evasion than at developing software to file returns. 

In conclusion: 

The increasing pressure from changes to financial reporting, tax and audit regulations mean that a general practioners who follow rules and regulations, such as myself will struggle to meet the challenges in the face of the "competition".

The irony is that software is a tool and tools should assist in ensuring that standards are met. However, because the software is not up to the task and because it is mandatory, it is infact an additional burden to accountants who ensure they do the job properly. 

As mentioned in a previous post: The fittest (best able to adapt) will survive.

In this case; The fittest accountant is the ignorant accountant.

If I were ignorant to the fact that the sale of a company's asset that is not subject to capital allowances raises a chargeable loss then I would have deducted it against profits chargeable to corporation tax and simply filed my first iXBRL return without issue. 

On 1 April 2011 ignorance became more than just bliss. 

Still, only 48 more years till retirement, assuming I can retire at the tender age of 75.

"Proper" compliant accounts can still be produced in Excel format for the directors and shareholders.

HMRC have apparently decided that they do NOT want these "proper" acounts instead they want their own iXBRL template version - so be it - NO problems, each party gets what they want.

Companies House has its own template, again just fill it in and give Companies House what they want, another satisfied "interested party" (we've satisfied four so far : directors, shareholders, HMRC, Companies House).

We live in an imperfect world, there's no future for perfectionism it just causes hassle.     Maybe if the software writing firm / consultants used by HMRC and Companies House got their act together we'd move closer to the perfection that some would seek, but until this happens we have to live with the imperfect product written for us to use.

I often see "OTT" accounts where unnecessary pages such as a "contents" page and a "company information" page are included - no legal requirement to include these, but paper continues to be wasted  on these superfluous pages by many firms of accountants who seemingly are blindly lacking initiative and following bad practice of wasting the planet.   One such firm's OTT output has even been known to include disclosure of directors loan accounts when they're in credit in Abbreviated accounts.   This is most certainly NOT a superior product but some would say that it is providing at a premium price.    Perhaps there's a market out there to identify companies whose "professional" accountants are over-disclosing in Abbreviated accounts.  Some investment in Companies House searches could be profitable, I'm thinking here.      Then there's an example of the "check list mentailty" - putting too much effort into meaningless robotic procedures and then missing the obvious - a recent example being losses incurred but NOT carried back to claim a CT refund (but, congratulations from the Practice Assurance brigade because unnecessary contents and company information pages have been included in the accounts plus idiotic planning schedules all laboriously completed on the file).    A classic example of blind obedience to the WRONG interested party causing financial loss to the more CORRECT interested party.  Some would say some "professional" firms have "lost the plot".

Here at Sage Accountant’s Division we’re also coming to the end of our first full week since the inauguration of iXBRL filing. It’s been busy since we launched the last of our iXBRL-enabled software solutions on 31 March (this was our Sage accounts production range).

Our MD, Jayne Archbold, has been watching the reaction of our customers, and has written a blog giving a few facts and figures from the world of iXBRL; they make interesting reading and it shows that iXBRL is very much the hot topic across the accountancy industry! http://www.xbrlwithsage.com/blog/?p=97 

Steve Porter, Sage Accountants' Division, xbrl@sage.com