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Online filing - corporation tax developments

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1st Sep 2009
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Companies House and HMRC have agreed a way forward for joint filing of accounts and company tax returns. Mandatory online filing is not far away.

A joint press release from HMRC and Companies House has formalised a move towards a joint filing arrangement which will impact companies over the next two years. It is already established that HMRC will require online filing of company tax returns and supporting data from 2011, but Companies House has now agreed to accept data in a similar format.

Mandatory online filing for both CT returns and related accounts and computations will come in as follows:

  • Affected accounting periods are those ending after 31 March 2010, so the first end of month accounting period that can be affected is 30 April 2010
  • The mandatory online rule applies to returns delivered after 31 March 2011, so you can avoid mandatory online filing by submitting returns and accounts early

For example, for the year ended 30 June 2010, the due filing date for the CT return is 30 June 2011, which would therefore be subject to mandatory online filing. However, if the return is filed early, say on 15 March 2011, then it is not caught by the new online filing requirement.

The next challenge is to understand the format of accounts and tax returns for companies under the new rules. While it is possible to file a return at present with the accounts and computations as attachments in PDF format, from the date of compulsion, all files must be in iXBRL format. This new format is the subject of the agreement between Companies House and HMRC, as Companies House has now agreed to accept accounts in iXBRL as well. The idea is to allow companies to make a single filing which will meet both HMRC and Companies House requirements, thus saving companies time and effort. Work will continue towards this goal over the next two years, but joint filing will not be mandatory.

Companies House will introduce their full iXBRL service for unaudited full (not abbreviated) accounts by the summer of 2010 and will then continue to develop iXBRL for all of the most common sets of accounts that they receive.

However, smaller companies may be concerned that meeting Companies House filing deadlines will mean that the company tax return will have to be filed well before the normal deadline if a single filing is to be made. This may well put some companies off the single filing option. Indeed, when HMRC looked to reduce the permitted period for filing company returns and bring it more in line with the Companies House filing deadlines, this was widely criticised and HMRC backed down on this point.

HMRC will be launching a new Corporation Tax Online service from Autumn this year (likely to be November 2009), which will include an iXBRL facility so that those who want to move over early can try it out. Commercial software providers are also working hard to develop XBRL - some already have this available.

How well prepared are you for XBRL? Let us know by taking part in this week’s XBRL poll.

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John Stokdyk, AccountingWEB head of insight
By John Stokdyk
02nd Sep 2009 10:15

Comment from Donald Drysdale, ICAS

I contacted ICAS assistant director of tax Donald Drysdale as part of my research into a parallel article on iXBRL, Fears grow over HMRC's CT online deadline. By the time we talked, the joint HMRC-Companies House release had been issued.

While he felt the tax software industry had responded well to the challenges of iXBRL, Drysdale echoed concerns raised by AccountingWEB.co.uk members about what would happen to companies and accountants who used proprietary software and Microsoft Office to prepare their statutory accounts.

Confessing himself "a little bemused" by the joint statement, he continued, "My perception is that the software industry will have difficulting producting compliant accounts production in time... Yesterday's statement says commercial accounts production software will be 'widely available', but it looks as though they're expecting everything to happen just the way they want."

When the single point of filing idea was first mooted back in 2005, accountancy's professional bodies voiced concerns about the plan. While the information submitted to Companies House is a minimum that organisations would want to see in the public domain, the workings sent to HMRC are far more detailed, Drysdale explained. The concerns raised about joint filing then about the wrong information might get to the wrong place remains a worry, he told me.
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John Stokdyk, Technology editor

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By laronde123
02nd Sep 2009 13:49

Digital Britain

Its seems that HMRC is starting to move ahead full steam with digital Britain not least because they realise the huge cost savings to be made and the number staff they will be able to shed. Clearly it would not be to difficult to file one set of data for accounts. As most accountants file accounts and tax returns at the same time already. would it just not be easier to merge companies house and HMRC, that seems an obvious step to most mortal people. Just extend the revenue filing to include an abbreviated set also. The days of filing paper return should be over. Clients should expect thier Accountants to be up to speed not stuck in the dark ages of tipex and typists.

Whilst thier at it also merge the Official Receivers office. Some joined up thinking.

David La Ronde

 

 

 

 

 

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By George Pearce
02nd Sep 2009 18:09

Accountants are already digital

From my perspective, many accountants have been 'digital' for decades. I started using computers in 1978 and first used a PC in 1985.  I have developed many systems which work very effectively for my clients and for myself, all using word, excel and Adobe acrobat.  The real problem comes from Customs and Excise and now, probably, Companies House themselves now becoming digital and expecting everyone else to adapt their systems to the weird requirements of these arrogant, thoughtless bureaucratic dinosaurs! 

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