Electronic filing
The measure
The Government introduced an amendment to the Income and Corporation Taxes (Electronic Communications) Regulations 2003 bill on December 7th. These amended regulations implement mandatory electronic filing using Inline Extensible Business Reporting Language (iXBRL) for company tax returns for periods ending on or after 1st April 2010 and filed on or after 1st April 2011.
Who will be affected?
Companies who file corporate tax returns, except from companies under a winding-up order, in administration or in administrative receivership. A company is similarly excluded if the directors and secretary are practising members of a religious society or order the beliefs of which are incompatible with such use of electronic communications.
Amended returns are not affected by the regulations and can continue to be filed on paper.
When?
The amendments come into force on 1st January 2010. Mandatory filing will apply for company tax returns for periods ending on or after 1st April 2010 and filed on or after 1st April 2011.
We believe this measure represents a missed opportunity to reduce costs for business. The main tax software vendors are planning to release compliant software in Spring 2010 and we expect that while there will be some issues bedding down the new iXBRL tax computation, companies using tax software should be able to comply. Statutory accounts production in iXBRL is a different story, many of the vendors are planning to release compliant software in Q3 2010. Large companies are facing a significant extra cost and effort to convert accounts done in Word or Excel to a compliant iXBRL format. Despite representations from business and industry bodies setting out the clear reasons for a deferral of the obligation to file statutory accounts in iXBRL, no mention of this in the PBR means that the government has missed an opportunity to reduce the cost of compliance for business.
