Corporate tax rules clarification leaves auditors relieved

News Article - 04 March 2010
Category: Regulatory

HMRC is to revise legislation requiring tax advisers to check clients’ corporation tax returns when filed in the new iXBRL format. Concerns have previously been raised that the requirement would put pressure on accountants to ensure their clients’ returns were legally correct, a particular issue if the company was also an audit client.

The news will be welcome to UK companies concerned about the pressures of switching to iXBRL. Last month HMRC urged the Accounting Standards Board to delay the replacement for UK GAAP, the accounting system used by non-listed companies, due to potential clashes with iXBRL. Meeting the demands of both new systems would put extreme pressure on UK businesses.

Tax returns will not have to be submitted in iXBRL until 2011, but the language is expected to affect accounting periods starting March 31st 2010. iXBRL makes separate pieces of tax data identifiable with ‘tags,’ allowing it to be more easily searchable and comparable with similar tax information. It also speeds up human understanding of complex tax documents.

The introduction of iXBRL has been controversial amongst accountants and industry figures, who claim the changeover will cost businesses hundreds of thousands of pounds. HMRC have said that, after the system becomes mandatory, companies who do not file both corporation tax returns and company accounts in iXBRL will be treated as if no tax return has been submitted.

Accountants and tax advisers may find that as compulsory iXBRL filing comes closer, there will be further changes to legislation and compliance regulations. The replacement of UK GAAP may also cause changes in the way companies do business; the landscape should be watched closely so that preparations can start as early as possible to reduce strain on resources.

Access understands the pressures of adapting to new accounting standards, and is helping accountants by providing functional accounting software that helps companies cope with the demands of switching to new accounting languages. Supplied with a powerful interface to the major accounts production packages, Access business software helps accountants more easily extract the financial data necessary to prepare accounts using the iXBRL standard.

Companies concerned regarding the effect iXBRL will have on current business operations should speak to their accountant directly.

---

More industry news

• Workplace bullying remains rife
• Businesses can learn lessons from expenses row
• Fewer manufacturing companies entering administration
• Fraud losses significant in 2010
• New policy suggests HMRC favours negotiation
• A third of businesses have had data stolen
• UK businesses to make bonuses harder to earn
• Innovation key to strong manufacturing sector
• Employees want flexible working more than bonuses

Back to news home page »