What, When, How? The rules for electronic filing explained
What must be filed?
All companies require on-line filing in year one. You are required to file:
- A CT600 - using an XML format
- A computation - using inline XBRL (iXBRL)
- Accounts- using inline XBRL
The number of possible data items which could be submitted in a computation and set of accounts runs to many thousands. Of these, there is an initial list of about 1,200 mandated data items (also known as tags). This list is likely to increase and it is anticipated that after two years the mandatory accounts list alone will probably be extended to the full list in the taxonomy of around 4,000 items.
HMRC are conscious of the challenges that this change will place upon businesses and have talked about taking a “soft landing” approach. This means that they do not intend to penalise companies who make mistakes in tagging if they have taken reasonable steps to comply.
When did the new regime begin?
Electronic filing is mandatory from 31 March 2011 for return periods ending after 31 March 2010.
Should you wish to file electronically earlier than the mandatory period then you are now able to submit some or all of the three components outlined above in the relevant electronic format. You are also able to make test filings to help you validate your electronic filings.
See the relevant HMRC pages.
How can you create the relevant electronic filing formats?
If you use tax compliance software, such as ONESOURCE Corporate Tax and Alphatax, this will support filing of the CT600 and computations in iXBRL. The software providers will also keep their software up to date with relevant legislative changes to changes to the taxonomy. The effort and complexity in the translation of CT computations into iXBRL is higher where “non standard” schedules or disclosures are included and where there is less standardisation in disclosure between your computations. Deloitte can help you to assess the impact of these factors and consider the cost benefit analysis of a standardisation / simplification exercise.
If you are using Excel for some or all of your computations then creating the required electronic filings will be more of a challenge to set up and to maintain. You should strongly consider the use of an appropriate tax compliance software product.
The accounts provide more complexity as they are traditionally generated and presented using Excel or Word rather than specific packages. See What are my choices for more information on the different approaches you could take to this and how Deloite can help you.
Registering for electronic filing
Your company will need to have registered for HMRC’s Online Services (although you may well have already registered for other online services). You will need to provide your name and email address as well as information such as the company tax reference number and companies house registration number (CRN) for each company. HMRC provide a guide to the sign up process on their website: