Rachael Singh

Technology Matters

A blog covering technology written by Accountancy Age reporter Rachael Singh

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iXBRL delay - what's the harm?

03 Feb 2011

hmrc-spending-review-cuts

SIX ACCOUNTANCY INSTITUTES have gone above HMRC's head and taken their request to delay an internet tax filing technology iXBRL directly to the Treasury.

Many may have already read that the ICAEW, ACCA, CIoT, AAT, ATT and ICAS wrote a letter to David Gauke, secretary to the Treasury, asking him to delay the iXBRL deadline by six months.

From 1 April all corporation tax must be filed to HMRC using the new data-tagging technology.

The argument to delay introduction has been raging between advisers and the taxman for more than a year. Going above HMRC's head however, could have advantages for the private sector.

It is hoped that the coalition government may take the view iXBRL is compliance red tape, introduced by the previous government. The new government has pledged to reduce this complexity.

The campaigners are only asking for half of the iXBRL requirements to be delayed. A tax return includes both accounts and tax data. The private sector is asking for just the accounts information to be filed without using iXBRL technology, for another six months. HMRC doesn't really use that information so what could be the harm?

The accounts information is mainly utilised by Companies House users and it hasn't mandated filing using iXBRL technology until 2013.

This politically could be an easy decision for Gauke. It would keep the accountancy profession happy while cutting red tape for businesses.

 

Look at me

19 Jan 2011

Demolition Man video conference

It was a shame to see a press release from Deloitte predicting that video calls will fail to take off this year.

It's been a long held belief of mine that video conferencing can offer huge environmental and cost benefits. Large companies with directors all over the world could speak face to face more than the usual twice a year at a fraction of the price of flying. Video conferencing has the potential to push business travel costs down, after installation, and increase face-to-face communication.

However the cost of installation is holding mainstream adoption back.

"With room-based video conferencing suites often costing more than $100,000 (£62,500), it is likely that there may be more airports in the world than companies with the ability to hold a sophisticated video call," said Jolyon Barker, global head of technology and telecommunications at Deloitte.

I find this incredible.

I thought with the increasing adoption of Wifi, which can offer cheap, fast and enhanced quality; video conferencing had a chance to progress this year, especially with the growing popularity of the iPhone, Skype, android phones, the iPad etc, and the increasing tax on fossil fuels.

During the Christmas break I watched Demolition Man. In one scene there is a board meeting with just one person in the room. The chairs are individual dial in video conferencing screens. The chairs even swivel round so everyone can keep their eyes on each other.

In the future I would love to see this type of boardroom to realise both the cost and environmental benefits.

I hope on this occasion that Deloitte is proved wrong.

 

Picture courtesy of Warner Bros.

1st time lucky

03 Dec 2010

IT issues can be deadly

I ATTENDED THE ICAEW "Implementing XBRL" roadshow today. It was presented by Paul Booth and Richard Anning, both from the IT faculty.

The event showcased HMRC's, Twinfield's, and Sage's, iXBRL products which most accountants will have to come to terms with if they file corporation tax. It was an opportunity for software vendors (and me) to learn, how prepared accountants are for the upcoming switchover on 1 April 2011.

And, for accountants, to find out what software is available.

Twinfield's founder Andre Kwakernaat raised the obvious and interesting question: Who, of the 80 or so accountants in the room, is planning to conduct a dry run and submit in iXBRL, ahead of the mandatory deadline.

Two people tentatively put their hand up, before thinking better of it.

So we may have a lot of iXBRL virgins next year.

Let's hope HMRC will stick to their promise of taking a "sympathetic" approach to fines for the first two years of implementation.

 

 

How much?

11 Oct 2010

The government has "stagnated" innovation in the technology sector, according to Phill Robinson, MD of the accountancy division at IRIS.

Robinson was talking about the government's upcoming deadline for the introduction of computer language iXBRL (inline eXtensible Business Reporting Language).

The technology will allow easier comparison of financial information for analysts and the government, which I thought, opened new doors for the technology and accountancy industry.

However, at what cost is this technology? Has the industry become stagnant, and will the accountancy profession see its IT costs increase dramatically?

Robinson said IRIS had to focus a significant amount of its resources on iXBRL, when that time and money could have been spent on finding ways to innovate for the industry.

But a representative from Sage, which doubled its research and development budget for iXBRL, believes compliance with the new technology has brought it closer to its customers.

Sage spent significant sums of money meeting customers to find out what they know and want from iXBRL. Jayne Archbold, MD of Sage's accountants division, told me she was hoping to include many of Sage's customer suggestions in the incoming iXBRL upgrades.

This sounds great and both IRIS and Sage have told me they will not charge customers with an annual licence for iXBRL upgrades. But they still face a cost pressure. The software developers' research and development budgets will shift upwards. How will they pay for that, if not through subscriptions?

Others face costs. Accountancy firms and businesses may also find themselves paying to train accountants on how to use the new technology.

We may have to wait some years to find out the true cost of iXBRL and in the meantime we'll just have to watch this space.

Is IT a young person's game?

17 Sep 2010

At a recent Blackberry event I attended, the point was raised that it can be difficult to convince the "older" generation to use high-tech gadgets in the day-to-day running of their practice.

A panel member from Sage told the audience it needed to "educate" some of the older accountants and customers that the return on investment from making the switch to mobile technology can be very lucrative. He added that educating younger accountants and entrepreneurs wasn't as necessary.

However, if my smartphone is anything to go by, then I couldn't blame accountants for being cautious. The battery life on my phone is almost non-existent and I have problems loading internet pages depending on where I am. All of these are issues that an accountant may find restricting rather than giving them greater mobility.

I think smartphone technology should be investigated, but being cautious may not be such a bad thing.

Also I'm not that old!

Faith in HMRC?

26 Jul 2010

The future of tax filing is set to change - as if you didn't know!

Just to recap, the government is doing away with current filing tools and insisting all corporation tax filings are made using thecompuetrlanguage iXBRL.

Although companies don't have to submit their taxes in this way until 1 April 2011, the fact that a whole new software development will be made by HMRC is one I was previously a little uncomfortable with.

But then I popped into a Sage conference last week and heard a speech by Julian Hatt, customer and stakeholder engagement, at HMRC.

Much to my surprise he admitted technology can go wrong and there could be "teething" problems with the filing system at the tax office. A great change from the attitude it had prior to the introduction of its gateway for online personal tax filing.

When he said HMRC would not be naïve and were trying to head off problems before they arose, I felt feint.

Hatt added HMRC would take a "sympathetic" approach to filers for the first two years of the switch over- if filers could show they had taken reasonable care of course.

Although I have still have a few doubts about a mandatory switchover for all companies, I am suddenly left feeling as though maybe, just maybe this could actually work without chaos ensuing.

However, Hatt briefly touched on the subject of extra taxonomies or "tags" that were irrelevant to companies. He mentioned that "bad debt provision" which doesn't usually feature in company accounts should be filled with "nill".

Is this an innocent mistake or is the accountancy profession suddenly going to be asked to account for this piece of information too?

The secret of success?

20 May 2010

I was recently asked what can technology do to make life easier for accountants?

Momentarily I was stumped. There are many upgrades in the pipeline; online and remote working capabilities; technologies that use less energy but run twice as fast; even technology which is able to calculate carbon emissions or VAT payments.

But then it suddenly dawned on me...... how about technology that just worked!

Accountants, and the public at large, have consistently complained the technology they have is not compatable with other programmes, or is slower than expected ,or is too complex, or just doesn't work the way they thought it would.

Technology companies take note all we want is something that does what it says on the tin.

In-line with deadlines

30 Apr 2010

iXBRL. When I mention that word in the office the team quickly back away from me.

I am excited by the changes. It is an easier way to compare information and use the data. iXBRL (In-line eXtensible Business Reporting Language) is essentially a form of tagging data which will make it easier to compare financial information between companies.

HMRC mandated from 1 April 2011 all corporation tax will need to be filed in iXBRL and online, with Companies House adapting its systems to allow the same format to be filed with them.

However like any new technology, understanding how useful, complicated and annoying it can be as well as how many risks are involved it will take time.

With just 11 months before the deadline many software houses are yet to be compliant with HMRC requirements.

Recent statics from Deloitte's tax professionals show 93% of businesses have done either little or no planning for the new filing requirements.

Over the coming weeks and months I am assured the software houses will be compliant, but what about a dummy run or playing with the software to understand its capabilities? As a company or their accountant getting your dates wrong or filing information late is a very costly mistake.

The burden of responsibility it seems will fall on the accountant. According to the same Deloitte research, in the US, 75% of companies outsourced filing requirements for a year in order to delay purchase of software - as well as allowing the market to mature when they switched to XBRL filing.

It seems accountants not businesses will need to research changes very seriously. If the accountant can't file the accountants and don't understand the changes or have the software, where are the businesses to go?

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