iXBRL is here to stay
The iXBRL deadline has come and gone. We are now past 1 April 2011 and quite a few companies have already filed their corporation tax returns and related financial statements electronically with HMRC in iXBRL. A good number of companies still have to get their financial statements tagged in the iXBRL format.
The HMRC have also adopted a ‘soft landing’ period for the first two years of the iXBRL filing. They have also stated that they will not issue penalties or reject returns if businesses have made reasonable attempts to submit iXBRL accounts. We believe that it is probably best for companies to get it right the first time and not rely on the soft landing period.
The HMRC have experienced a few teething issues with iXBRL filing. As discussed by Rachael Singh in a recent Accounting Age article1, the HMRC free tool had a 94% success rate of iXBRL corporation tax returns filed and there was a 65% success rate by using all other commercial software. The most common error was the re-submission of a return that had already been filed successfully.
Companies, who had filed before the 1 April 2011 deadline, now have a far better insight into the options available for iXBRL based on feedback from the market. The feedback suggests that the following important questions should be asked before a solution is decided upon
- Tagging accounts requires accounting expertise. It is not a clerical process. Do they have sufficient surplus qualified staff?
- By its nature this task tends to be annual. Can they cope with a skewed demand for this work with an in-house resource?
- How will they ensure that expertise is carried from one annual exercise to the next?
- Have they assessed the full cost of an in-house solution, including software maintenance, training, manpower, supervision, review and rework?
The options available are:
1. Using the HMRC free tool
2. Using an Accounts Production Software
3. Using a Tagging software
4. Using a Managed tagging service provider or Outsourcing
Companies House on the other hand is expected to mandate iXBRL filing of financial statements by 2014. As discussed by Paul Booth of ICAEW2, Companies House continue to encourage voluntary iXBRL filing of accounts in the hope to make better progress with online filing without the distraction of mandatory filing.
It is widely accepted that iXBRL is here to stay, so following an initial rush to action many are re assessing their approach in the light of experience. Firms and companies are focusing on ensuring their solutions are sustainable, reliable, and affordable in the long term. As a result many are finessing their approach (for example establishing a fallback for business continuity), and in some cases even changing tack entirely.
If you are reviewing your approach or solution we suggest that you may find the flexibility offered by the DataTracks pay-as-you-go outsourced solution helpful. DataTracks is an economic, convenient and reliable main solution, but it also works very well as a fallback or peak period solution.
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1: Rachael Singh , Accounting Age, 6th June 2011
2: Paul Booth, ICAEW, 27th June 2011 http://www.ion.icaew.com/itcounts/22622