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Friday
Jan292010

Online Tax Submission – As easy as XBRL!

Encouraged by HMRC, who are keen to see as much work conducted electronically as possible, the speed, convenience, control and cost effectiveness of e-accounting has these days been established as the default method of handling tax information. Little wonder that so many organisations have already chosen to adopt e-accounting.

What seem to be less popular though are the HMRC proposals for the compulsory use of XBRL (extensible business reporting language) in the new compulsory online submissions.

The Government has introduced a timetable that requires companies to submit a range of statutory accounts and tax computations in the new XBRL data format by April 2011 for accounting periods ending after 31 March 2010. Despite the protestation of some industry professionals such as the Institute of Chartered Accountants of Scotland (ICAS) who argue that it is 'absurd to require businesses struggling during a recession to introduce a mandatory online tax filing system,' HM Revenue & Customs (HMRC) is set on implementing Lord Carter's recommendations to increase online filing.  Taxes moving to compulsory online filing are:

    * End-of-year and in-year PAYE (Pay As You Earn) forms for employers – It is already compulsory for employers with more than 50 to deliver PAYE tax returns online. Smaller firms will have to file their end-of-year forms online by April 2010 at the latest, and filing in-year forms will become compulsory from April 2011.

    * VAT - for companies registered on or after April 1st 2010, as well as any company with a turnover of £100,000 or above. (HMRC will begin the process of phasing out paper VAT returns from April1st 2010).

    * Corporation Tax – Must be delivered in XBRL from 31 March 2011, relating to periods ending on 1 April 2010 or later.

To add to the ICAS complaints The Tax Faculty of the Institute of Chartered Accountants in England and Wales say, 'We cannot currently see any compelling business case to support compulsory use of XBRL by taxpayers and agents.'

Although the Self Assessment online filing system that has been in place a number of years now seems to be operating effectively and efficiently, it's not error free. It seems to be a wariness of technical problems added to concerns over technological compliance and readiness that are fuelling concerns.

If you have any queries or concerns, take professional advice and talk with your accountant for all the latest up to the minute information.

 



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