HM REVENUE & CUSTOMS is backing down on its new tax technology requirements.
The taxman announced it would not increase the level of detail needed to submit online corporate tax returns and statutory accounts as it had originally planned.
On 1 April 2011 HMRC mandated that all corporate tax returns must be filed online using tax tagging technology iXBRL. However, it created a “soft landing” and limited the number of tags needed to file tax returns, planning to significantly increase that in 2013.
It previously announced it would substantially increase the level of tags required on 1 April 2013 – something the technology industry has heavily invested in to meet this expectation.
HMRC has now U-turned on that plan and said there would be no significant increase in tagging requirements in 2013, and no major changes thereafter without consultation.
A statement said: “HMRC undertook that there would be no extension before 31 March 2013 of the list of specified information which, where present in accounts or computations, must have an XBRL tag.
“HMRC had asked for views on increasing the amount of XBRL tagging when the transitional period expires at the end of March 2013. All responses agreed that there should be no major extension of the list of specified information from April 2013. HMRC has accepted this view and the tagging requirement will not change in April 2013.”
Katharine Arthur, tax partner at MHA MacIntyre Hudson, said: “This U-turn is welcome and shows that HMRC has listened to representations.”
However, Arthur argues that small companies should be made exempt from the tagging requirements entirely.
“The existing iXBRL requirements place a heavy administration and cost burden on companies, particularly smaller ones. Small companies should be exempted from this requirement unless and until HMRC can justify their inclusion on a cost/benefit basis,” she said.
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