Business News

January 2011

Online Filing Protocol Signals Death Knell for Spreadsheets Used to Prepare Company Accounts

Preparing accounts on a spreadsheet used to be easy but the introduction of compulsory electronic filing of company accounts using ‘iXBRL’ means this will no longer be the case.

As anyone involved in the preparation of company accounts in the UK will be aware, all Corporation Tax filings and supporting documents must be in iXBRL format from 1 April 2011.

iXBRL (Inline eXtensible Business Reporting Language) is an international computer-based language format which allows business data to be communicated via tagging of individual items of information with machine readable codes.

By requiring all Corporation Tax returns to be filed online, and in a uniform format, HM Revenue and Customs (HMRC) hopes to reduce its own administrative costs.

However, this means that businesses which do not currently use this method will need to get to grips with a new system.

Since the rule applies to tax returns for periods ended after 31 March 2010 which are filed after 31 March 2011, some firms may be able to delay the changeover for a year by ensuring they file a paper tax return before the March 2011 deadline. However, after that, iXBRL will become unavoidable.

Milsted Langdon is ready for the forthcoming change of requirements and our clients can be confident that we can apply the necessary iXBRL tags.

Businesses that use accounting software should find that it will be updated to cope with the changes before iXBRL becomes compulsory, but for those who currently use spreadsheets or word processing documents to put their accounts together it may prove more of a challenge, requiring either the use of a computer programme which will add the tags, or the instruction of a third party to do so.

For more information please contact us.