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29 Jun 2010
Accountancy firms are not geared up to tackle the switchover to the new online filing system to be brought in by HMRC next year.
A survey conducted by CCH, the accountancy technology business, found accountants are still undecided on how they will convert data into the new format to file corporation tax returns.
HMRC mandated from 1 April 2011 all corporation tax filing must be in a new computer tagging language known as iXBRL (in-line eXtensible Business Reporting Language), which is hoped to make comparing financial information easier.
Less than one in ten (8%) of accountants surveyed have decided how they will convert accounts to iXBRL format before filing at HMRC.
David Routley, technical product manager, CCH, said: “What the CCH research has shown is that accountants are still not geared up for the move to compulsory e-filing next year.
"Two critical areas, converting data into iXBRL format which can be time consuming, and a lack of clear formalised relationship agreements, will mean that they could be faced with unplanned additional costs and a resource drain next year."
More than 30% of accountants submit corporation tax returns for clients from
information produced by third parties. However, 52% of third party information
is currently submitted in paper format and 48% in pdf, the least iXBRL friendly
formats.
Routley added: “Accountants will need to spell out to clients and third parties
who will be responsible for ensuring the tagging of data, otherwise they will be
left with a much larger volume of work than they expected."
Further reading:
HMRC deadline fears for software firms
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Visitor comments Add your comment
Pot Kettle Black
Are CCH ready for iXBRL? last time I looked about a month ago they had not released an accounts production app that had iXBRL functionality, and could not tell me what the plan was for their Corporate Tax product.
Perhaps they should spend somemore time writing software rather than surveys.
Posted by: David Watson, 29 Jun 2010 | 00:00
What Tosh
The reason accountants are still unaware is simply because software companies have not been given sufficient time to produce the software correctly. HMRC still have not got an approved system for dealing with this and have not produced sufficient guidence to its tax paying communities. An accountant is not there to explain the format required, they are their to prepare accounts and submit to HMRC/Co House. Why would we waste our time and not get paid for explaining to clients that simply do not care how tax forms are submitted. They are only interested in doing what every good business should be doing and that is to survive in this economic climate.
Posted by: David Cook, 30 Jun 2010 | 00:00
HMRC's iXBRL Recognition process
It does seem a bit strange that accountants are waiting for software systems to get them ready and then a software house to imply that accountants are dragging their heels! Surely CCH have been misquoted there. The recognition process set up by HMRC for recognising providers that can consistently output valid iXBRL exists. So there are options out there. Check out http://www.hmrc.gov.uk/efiling/ctsoft_dev.htm for the full list of recognised suppliers, we are in the Conversion Software category - we convert Excel and Word into iXBRL.
arkksolutions.com
Posted by: Richard Metcalfe, 02 Jul 2010 | 00:00
The processes surrounding iXBRL need to be considered
It?s undeniable that software is at the heart of the change as where firms are using commercial software systems to prepare all their accounts and tax computations the move will be a much smoother one. CCH?s software systems are currently undergoing the HMRC recognition process for iXBRL and will be released well in advance of the mandatory filing deadline.
However there are instances where either the client or another agent is providing the accounts to prepare the corporation tax return. This research highlighted the need to ensure that clients are aware that if this is the case, there are additional considerations which may have cost implications. For example, if accounts are provided in a format other than iXBRL they would need converting prior to submission to HMRC, so the client needs to be aware of the potential risk with accounts being provided from a third party which are not sufficiently or correctly tagged. The engagement letter is the key to defining this relationship and it is crucial that firms ensure they have clearly set out where the responsibilities lie under the new regime.
Basically, preparing for iXBRL isn?t just about submitting the return
Posted by: David Routley, 07 Jul 2010 | 00:00