Taxman urges delay of UK GAAP replacement

News Article - 15 February 2010
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HMRC has called for a delay to the introduction of a replacement for UK GAAP, the accounting system used by non-listed companies operating in the United Kingdom. iXBRL, a new standard of electronic filing, is scheduled for implementation at the same time. The taxman says the introduction of two new standards will put too much strain on accountants’ resources.

The current plan is for UK GAAP to be replaced for financial years from January 1st 2012. If accountants are expected to switch standards on this date, preparations will inevitably be underway in the latter half of 2011, the same time companies will be adapting to the new demands of iXBRL. iXBRL does not become compulsory until 2011, but is expected to affect accounting periods starting March 31st 2010.

In a proposal currently being considered by the Accounting Standards Board, HMRC has requested the changeover date for UK GAAP be pushed back to allow accountants’ resources to be dedicated to iXBRL. Senior sources within the ASB have said consideration is already being given to a possible date change. HMRC has not been the only source of concerns regarding the overlap: ASB have received similar proposals requesting a delay on the introduction of UK GAAP’s replacement.

Both changes are expected to have a significant impact on the ways accountants do business. With no firm dates on when the changes will take place, mid market enterprises – particularly unlisted ones – must watch developments closely to ensure preparations can be made in plenty of time. Adapting to each standard is likely to require significant amounts of time and company resources. If ASB chooses to decline a date change for UK GAAP’s replacement, businesses will face even more strain and pressure when adapting.

Recognising this is an issue for the profession, Access is lending its support to accountants, whose clients are using Access business and accounting software. Access provides a simple interface with the major accounts production packages, helping accountants extract the financial data they need to prepare the annual accounts using the iXBRL standard. 

Businesses who are concerned about the proposed iXBRL changes should contact their accountant for more information.

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