HM Revenue & Customs (HMRC) has issued an urgent alert about important changes to Corporation Tax (CT) coming in this April.
The changes will require all company tax returns sent in from April 2011 to be filed online, for accounting periods ending after 31 March 2010, in a specified data format (known as Inline XBRL or iXBRL). CT payments must also be made electronically from April 2011.
XBRL (short for eXtensible Business Reporting Language) is a computer readable format for financial data. It works by putting a tag on each piece of electronic data (text or numbers) within a document. Inline XBRL makes XBRL readable by humans. It guarantees that the layout and presentation of information looks the same for both the author and the person receiving it, whether it is being viewed online or as a printout.
XBRL provides major benefits in the preparation, analysis, re-presentation and communication of business information. It also offers cost savings through greater efficiency, improved accuracy and reliability to all those involved in supplying or using financial data – long-term these are expected to far outweigh any initial development/set-up costs. It is based on XML (EXtensible Markup Language) which is, in computing terms, a mature standard, and a proven technology that has been in use for many years.
As well as limited companies, the changes will affect other organisations that pay corporation tax, including clubs, societies, associations, co-operatives, charities and other unincorporated bodies.
Companies will be able to file online either through commercially available software or by using HMRC’s own CT filing software, which is aimed at companies with less complex tax affairs. A wide range of commercial software is already available, with more coming soon. For more information, visit www.hmrc.gov.uk/efiling/ctsoft_dev.htm.
To sign up for Corporation Tax online filing visit www.hmrc.gov.uk/ct and then click “Register for Corporation Tax Online” where you can register. These pages also have lots of information on the changes.
New joint filing service
HMRC and Companies House have launched a new joint filing service for company accounts. The new service means that companies with relatively straightforward financial affairs, or their agents, can send their accounts in iXBRL format to HMRC as part of their Company Tax Return, and also send these accounts, or an abbreviated version, to Companies House.
Before you can use this service, you need to have registered for HMRC Online Services and enrolled for Corporation Tax Online. You then use HMRC’s Corporation Tax online filing software to submit your accounts to both organisations using a template. For more information, visit www.hmrc.gov.uk/ct/ct-online/file-return/joint-filing.htm.