Mandatory online filing for corporation tax
From 1 April 2011, companies will be required to submit corporation tax returns online, in the iXBRL format.
HMRC has already written to companies who file corporation tax returns to outline some basic aspects of the changes. Although companies have been encouraged to file their corporation tax returns online for several years, these were effectively submissions of PDF documents direct to HMRC. Under the new rules, companies will no longer be able to use the PDF filing facility, or file returns by post.
What is iXBRL?
From 1 April next year, both the CT return itself and the computation and accounts that are submitted with it must be in a computer language known as iXBRL.
iXBRL combines a human-readable document (essentially, your computations and accounts will look the same as they do now) with the ability of computer software to include 'tags' within the electronic file which will enable HMRC to interpret and analyse the document.
By and large, it is the use of the iXBRL format for both the accounts and the tax computations which gives rise to the most significant changes under the new regime. For most businesses, the preparation of documents in this new electronic format will require adaptation to existing software, or conversion tools to present existing documents in the new format.
Charitable companies are also affected if they produce accounts in accordance with the Companies Act 2006.
We will be writing to all of our clients in the next few weeks with details of the steps Littlejohn is following to ensure that all of our clients can meet the requirements of the new regime.
Also, in future editions of Tax Matters, we will keep you up to date on the status of the new regime, and on Littlejohn's compliance measures.
If you have any questions about how iXBRL will affect your business, contact your Littlejohn tax advisor or Chris Riley on 020 7516 2427 or email criley@littlejohnllp.com
