New format 'will affect company filings'

Date: 12th August 2009

Small businesses have been warned that there are changes forthcoming regarding the way they file their corporation tax returns and other accounts-related documents.

Firms will face fines and penalties if they do not adapt to the reforms, Computing.co.uk reports.

HM Revenue & Customs (HMRC), the UK taxation authority, is to require all companies to provide documents in inline eXtensible Business Reporting Language (iXBRL), rather than through Word or Excel alone.

Making the filings through the inline electronic format will then assist HMRC in its own analysis.

The new rules apply for all corporation tax returns, company and group accounts submitted after the end of the current 2009-10 financial year.

Effectively, compulsory iXBRL will come into force in April 2011.

Computing.co.uk advised smaller firms to formulate their accounts in Word and Excel documents as normal - and to make them convertible into iXBRL after they are finished.

This is likely to prove cheaper and less inconvenient than redesigning their systems and processes entirely to build in the new format.

"HMRC has said that if organisations are unable to submit both corporation tax returns and company accounts in the prescribed format, it will reject the submission, and offenders will be treated as having not filed their returns at all," the report added.

"This could mean penalties and pressure from the authorities to comply."