Treasury rejects institutes' plea for iXBRL delay

CALLS TO DELAY the introduction of iXBRL have been rejected by the Exchequer secretary to the Treasury.

The major accounting institutes had urged a delay to the introduction of iXBRL.

From 1 April all corporation tax submissions must be filed to HMRC using the new technology. The institutes wanted a delay because of concerns that software houses were too late to produce adequate software to deal with the new filing format.

Six of the main institutes wrote to the exchequer secretary to the Treasury, David Gauke, requesting the government push back the implementation deadline by about six months.

Gauke has responded that the start date will remain as 1 April.

He said: “My objective is the smooth introduction of mandatory online filing of CT returns in iXBRL format from 1 April 2011. It seems to me that there will never be a perfect time to mandate filing in iXBRL. There will always be implementation challenges, and HMRC’s challenge here is to work through them in collaboration with the representative bodies.”

Gauke added, the taxman will adopt a soft landing for the first two years of introduction. Filers with a “reasonable excuse” who have made mistakes in their corporation tax submission will not face any penalties. HMRC will publish guidance on “what constitutes reasonable excuse”.

Gauke’s response can be accessed here.

Update:

Donald Drysdale, assistant director of tax at ICAS, said: “While the potential benefits to HMRC are obvious, companies and tax agents are left picking up the costs.

“Most of them must rely on commercial software vendors, some of whom have failed to deliver their accounts preparation solutions in time.  Other packages fail to offer the degree of automated iXBRL tagging that had been anticipated, leaving skilled staff with the cumbersome task of completing the tagging manually.

“He [Gauke] has expressed the wish that any transitional issues should be managed effectively, emphasising that no-one who has made a reasonable effort to comply will be penalised and that anyone with real difficulties should contact HMRC.

This is far from ideal, given that contacting HMRC can be an almost impossible task at the best of times.”