With attention on XBRL firmly focused on developments with the SEC ncerns are growing that most finance directors in the UK are blissfully unaware that from 2011 they will be required to submit tax returns and acunts using the XBRL mark up language. Gary Simon, FSN’s managing editor reports.

As from 1 April 2011, for any acunting period ending after 31 March 2010, mpanies must file their pany Tax Return (including supporting documentation) online, but the acmpanying acunts must be filed in XBRL (Extensible Business Reporting Language). For example, a mpany with a 30th June 2010 year end must file its acunts and CT Return with HMRC in an XBRL format by 30 June 2011.

Acrding to Bivek Sharma, Partner, pliance and Technology at KPMG, “The majority of mpanies are mpletely unaware of this ‘ticking time-bomb’. The problem isn’t the filing of CT Returns because tax software vendors are already working hard to ensure that tax numbers can be filed in an XBRL format but the filing of mpany acunts is a different matter.”

Sharma told FSN, “Almost all large and medium sized mpanies manually produce their acunts using MS Word, Excel or similar applications. To mply with this deadline, mpanies will need to reengineer their in-house acunting processes and implement systems capable of producing mpany acunts in XBRL format.”

Acrding to KPMG, HMRC have stated that if anisations are unable to file both CT returns and mpany acunts in the prescribed format then HMRC will simply reject the submission.

But mpanies this side of the Atlantic will be unable to take advantage of the extensive work being carried out in the United States as mpanies prepare to file quarterly or annual 10Q’s and 10K’s.

After several years of “will they?”/”won’t they?” the Securities and Exchange mission in the United States has pressed the green light on ‘interactive reporting’ using the XBRL standard.  Around 500 of the largest mpanies who file using U.S. GAAP with a public float above $5 billion will be required to provide interactive data reports starting with their first quarterly report for fiscal periods ending on or after June 15 this year.  Other mpanies will be phased in over the next two years.

Sharma told FSN, “In the US the XBRL filings are simply that, i.e the submission of machine readable de, as if you were pressing the ‘view source’ in your inter browser.  The big difference here is that HMRC are asking for in-line acunts – that is acunts normally presented so that they can be read by a human but with the ability to view the supporting XBRL underneath, rather like electronic skins.”

For the moment, says Sharma, most of the popular acunting packages do not support HMRC’s preferred format.

It is a ncern shared by David Taylor of Trintech and a Member of the FEI CFIT mittee (mittee for Finance and Information Technology).  Talking to FSN, Taylor said, “We have recently observed that there has been very little ncise verage of the imminent needs to be mpliant with HMRC for XBRL on rporation Tax, as well as developments for panies House Statutory reports. We think that this is a ticking time-bomb with very few UK businesses familiar with XBRL or the requirements to file in-line acunts.  It’s a requirement that is going to affect all multinational mpanies with a subsidiary in the UK.”

“The rporation Tax side of things is probably being handled by tax packages but the acunts requirement is another matter. I’m not aware that any of the popular packages can pe with it,” added Taylor.

It is a hole that KPMG hopes to exploit. In the short term KPMG is offering an XBRL Mapping Engine [XME] which allows prepared statutory acunts to be nverted into XBRL.  In the longer term the firm expects that there will be automated preparation of statutory acunts, including XBRL tagging.

“Our XME tool allows manually developed acunts in Excel to be imported, tagged and mapped using the appropriate XBRL taxonomy,” added KPMG’s Sharma.

Sage, one of the UK’s leaders in mid-market acunts packages is currently working on the new rules, focussing initially on professional acuntants.  Stuart Lynn, Head of Research and Development for Sage mid-market told FSN, “We are working on a nsortium with HMRC and Grant Thornton, examining the production of XBRL from our Acunts production packages.”

“We have been working with electronic filings for some time and for example support e-filings from Payroll and similarly VAT e-filings from our mid range products such as Sage 50,” he added, suggesting that Sage will take any changes in its stride.

However, whether acunts filings will be able to be shared with panies House, saving mpanies the burden of multiple submissions remains a mute point. By 2011 it is expected that mpanies and their Agents will be able to file pany Acunts and pany Tax Returns jointly if they wish to, making one submission to ver both. This will offer a rction in the mpliance sts associated with providing overlapping information to two ernment departments.

HMRC says they will still require, as now, full statutory acunts to be submitted as part of the pany Tax Return. The acunts the mpany submits to panies House may still be full or abbreviated (if this is permitted under the panies Act). The intention is that this will be possible as a single submission, with each department only able to aess the data that it gets now. HMRC adds that there are no plans to change either the statutory filing deadlines for acunts to be submitted to panies House or for pany Tax Returns to be filed with HMRC.