HM Revenue and Customs' (HMRC's) changes to the way we file corporate tax returns and supporting documentation become mandatory from 1 April this year.
How prepared are you for this change? Read on to find out more.
What are the impending filing changes for corporate tax returns?
HMRC has announced that, "from 1 April 2011 for any accounting period ending after 31 March 2010, all Company Tax Returns must be filed online with accompanying financial statements and computations in iXBRL format".
iXBRL (inline eXtensible Business Reporting Language) is a new, electronic format for business information, which HMRC expects to provide benefits in the preparation, analysis and communication of business and financial data. iXBRL is becoming a global standard for financial reporting.
How does this impact on companies?
When companies send their tax returns to HMRC after 1 April 2011, they will have to do so electronically and attach iXBRL financial statements and computations. Otherwise their tax returns could be rejected by HMRC.
Companies will need a method to create iXBRL documents, which will either involve:
- upgrading or purchasing software and training staff, or
- outsourcing to an organisation who can prepare iXBRL documents.
Either way, there is additional work compared to preparing financial statements and tax computations submitted to HMRC by post and there will be a cost implication, particularly for financial statements.
What should companies be doing?
You may not have to submit your tax return on 1 April 2011, but you should be considering what method you will use to meet this requirement.
Grant Thornton has developed a solution that is high quality , automated to the greatest extent possible and can be tailored to our clients' needs.
Our iXBRL filing factsheet pdf 80KB) has more information on iXBRL and our solutions for both tax returns and financial statements. We can also provide advisory services to support you should you choose to address this in-house.
For further guidance on how this change impacts you, please speak to your Grant Thornton representative or contact an office nearest to you for assistance.