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How will the e-government single contact point happen?

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24th Mar 2005
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The Chancellor of the Exchequer signalled a major technology shift in his Budget speech last week when he floated the idea of a "single point of contact" for VAT and corportion tax.

Chancellors usually have little time to get involved in the intricacies of online data exchange, but this will be the inevitable consequence of this statement halfway through his Budget speech: "The Inland Revenue and Customs will also now consult on a single tax account for small business where information need be provided only once, a single point of contact for both VAT and corporation tax."

The Revenue & Customs online plans are a little more advanced than Brown suggested. A couple of weeks before the Budget, Customs R&D chief Alastair Stewart said the ultimate aim was a one-stop portal for companies to file all of their corporate information. In this scenario, companies will file their tax and PAYE returns along with their year-end accounts on the government Web gateway, and the relevant information will be channelled through to the tax bodies and other agencies such as Companies House.

"Ultimately there will be a single portal for filing information with the government and the data will be disseminated to individual departments to improve efficiency," Stewart said.

The same idea was repeated not just by the Chancellor, but in the Revenue and Customs Budget consultation paper, Working towards a new relationship (370k PDF).

The merged Revenue & Customs website will become the first step towards the single point of contact and present a "whole customer view" so that small businesses and their advisers will see the same information as tax officials. Online transactions will be streamlined and users will get a single reference number. The Treasury's regultory impact assessment of the merger goes further and comments, "The new department will also be developing its systems to help realise the benefits of advances in technology such as XBRL (eXtensible Business Reporting Language) that will enable electronic communication of financial data in business accounts and records to other parties."

Anyone who prepares statutory accounts or is responsible for VAT, corporation tax and PAYE returns will need to ensure they can submit the data in the approved format. As we have seen from Self Assessment Online and electronic data interchange for PAYE (the Internet option opens on 6 April), the government's computers can get stroppy when presented with messy data.

XBRL is a grand concept that emerged in the 1990s to give companies and analysts a means of sharing and examining financial statements electronically. XBRL-format financial statements are now accepted and published online by the US Secruities and Exchange Commission's Edgar site, and the standard is supported by major organisations such as the Big Four accountancy firms and IT giants such as Microsoft and IBM.

But there is still a long way to go for the grand concept to translate through to practical expression. While US have started filing XBRL accounts, the migration to UK and international financial statements has been slow. And every time a new variation is introduced, the overall utility of the standard diminishes.

The UK business software trade body BASDA is openly sceptical of XBRL, particularly as a vehicle for e-government. BASDA chief executive Dennis Keeling claims that because XBRL is still a moving target, developers are finding it hard to build support for it within their programs. And he points out that the XBRL project teams at both the Inland Revenue and Companies House are having trouble defining XBRL schemas to meet their specific needs.

On behalf of the industry, Keeling embraced the simpler text-based Standard Audit File (SAF-T). Many developers are using their own XML tags to transfer data within programs, or are applying BASDA's eBIS-XML standard for e-commerce transations.

XBRL was initially designed for tagging and displaying the data contained in financial statements, so the requirement should be straightforward for Companies House. But new data tags will need to be agreed to cope with PAYE - for example to define benefits in kind, car allowances, tax codes and so on, while VAT introduces variants such as exempt and partially exempt services and goods and so on. How will these additions be agreed, and how will they be bolted into the ever-expanding collection of XBRL standards?

Gordon Brown set the ball rolling in his Budget speech and the Revenue is inviting responses to its consultation paper. But if you're a user (or developer) of tax, accounting, payroll and accounts production software, the issue will return to haunt you as the government refines its online strategy.

John Stokdyk
Editor, AccountingWEB.co.uk

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By Abacjm
25th Mar 2005 03:18

The Only Obvious Answer...!
The govt will rename the Gateway "Media Gates-way" and all Tax Inspectors/Officers/humble Clerks and tealadies will take delivery of a brand new Microsoft Media Center, so that they can control Corporation Tax, PAYE, SA, and VAT all with one remote!

Just imagine the Contracts for new software companies, Learn Direct et all, and they could all be funded by an in-grant that no one knows is being claimed or not, through R&D Tax Credit!

No wonder Mr Brown loves the tax credit system. If the majority of claimants, who, in reality may actually depend on such income, are put off by the baffling bamboozlement of the paperwork, he is quids in, compared to giving every taxpayer a decent rise in either personal allowance or broadening the starting rate of tax.

Does any audit get carried out of the Tax Credits system? How many people gave up on it? Does the legislation ACTUALLY say, that it must be claimed within 3 months of year-end or is this the Revenue interpretation, to suit their workload? I have never been able to find an answer to that.

Maybe I need a Media Center machine too!

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