Thomson Reuters filed a corporation tax return in electronic Inline eXtensible Business Reporting Language (iXBRL) format within the first few minutes of the mandate set by HMRC. As of 1 April 2011, all UK companies are mandated by HMRC to file their corporate tax return, including the computation and statutory accounts, electronically or risk incurring penalties.
The new online filing regime is the biggest tax-led change since Self Assessment and will affect nearly 1.5 million businesses in the UK. This new regime will have a fundamental affect on those that work within both tax and finance departments with all eyes focusing on how these departments cope with the change.
Mai Trinh, head of UK Tax Compliance, Thomson Reuters said: "Since the introduction of mandatory online filing, we have been working with our Tax & Accounting business to help understand how this would impact our corporate tax and statutory accounts processes.
"We had been using ONESOURCE Corporate Tax for some time and knew filing the computation and return electronically under HMRC's new regime wouldn't be too complicated, with the tagging technology built into the software. The real process change for us would be implementing iXBRL technology for the statutory accounts process."
The common statutory accounts production process for many in-house finance departments at larger UK companies is split into a three tiered approach.
- Initially identify data from one or more reporting systems or ledgers and transfer into Excel
- Aggregate and perform adjustments - potentially including audit adjustments, statutory reclassifications and movements between international and local GAAPs
- Production of the Profit & Loss and Balance Sheet alongside the signed director's report
There are three core components in compiling a corporation tax submission - the CT600, the computation and the statutory accounts. Some tax software tools are capable of preparing the CT600 and the computation in the required format. However, the main issue that has been facing the corporate market place is how the statutory accounts should be prepared in the required iXBRL format. There are three main options available;
- Purchase a "tagging" tool which will enable companies to mark up each set of accounts (either through automated routines or manually)
- Outsource the tagging to a third party provider
- Move to a full accounts production solution with the iXBRL tagging automated
"During the next three to five years, we expect the majority of these businesses will move processes to an Accounts Production solution."
Helen Campbell continued: "Factors such as the planned mandatory electronic filing of accounts for Companies House from April 2013 and implementation of IFRS heavily influenced our decision to move to a full accounts production solution. Using ONESOURCE Accounts Production and ONESOURCE Corporate Tax we have been able to look at the entire filing process and be confident in the filing we made to HMRC in the first few minutes of April 1, 2011."
"It is a hugely exciting time to be working in the world of tax and accounting. Practitioners can benefit today from technological innovations that simplify compliance, cut costs and in turn, strengthen foundations for future growth," concluded Mike Roberts.
source: Thomson Reuters
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