The ‘soft landing’ finally comes to an end next week, so here is the last article in the recent series discussing the consequences and summarising some of the important themes.
A few initial questions:
- Are you applying only the minimum number of tags just to pass the HMRC Gateway?
- Do you know the difference between this and the Minimum Tagging List (MTL)?
- Are you aware of what really happens at the end of March?
- How accurate is your tagging?
- Why is it wise to apply full tagging to your financials?
- How much at risk of HMRC investigation are you?
You may think you’ve conquered the challenge of reporting to HMRC in iXBRL, but have you?
Complying with the mandate
Until now, it’s been possible to make successful filings simply by applying a very small number of iXBRL tags (around 13) to your accounts. Assuming that this has been done correctly, the accounts will be accepted at the HMRC Gateway. You don’t even need to tag to the full MTL, which gives you the choice of around 1300 tags, of which most organisations would normally use around 100.
Many believed that when the ‘soft landing’ comes to an end next week the MTL would disappear and were relieved to find that HMRC decided after all not to abandon it in favour of the full taxonomy containing around 5,000 tags from which to choose.
But it’s not the end of the story. The MTL may remain for now, but the ‘soft landing’ is ending.
The hidden issues behind the end of the ‘soft landing’
Even though the MTL stays and you’ll still be able to use your 13 tags, there are other more important issues to be considered.
In May 2012, HMRC issued an interesting statement* that included the following:
“Some software products already support fuller tagging of accounts than is required by the list of specified information and others are coming to market. More information with XBRL tags helps HMRC’s risk assessment, reducing the demands it needs to make on the majority of companies in assuring compliance with tax obligations.”
How should this be interpreted? Effectively, that tagging more rather than fewer concepts is a way of showing HMRC that the company has nothing to hide. There’s another HMRC statement highlighting the need for accuracy and transparency of reporting: “ …incorrect or missing tags may trigger HMRC’s risk-assessment rules – for example skewing one of our risk ratios…” Together, these statements point towards tighter scrutiny by HMRC and a new regime in which tax inspectors will be less lenient, inaccuracies will prompt further investigation and risk ratios will be used to pinpoint organisations with results outside expected norms.
You can no longer afford to be complacent about your iXBRL accounts tagging.
How Seahorse® can help
Accuracy and transparency of reporting can be achieved using CoreFiling’s Seahorse tagging tool for the conversion to iXBRL of accounts prepared in Word and Excel.
You may choose to continue with your 13 tags to pass the Government Gateway or use the power of Seahorse to achieve greater transparency and avoid unwarranted investigation. Prudent companies will choose to tag at least in accordance with the Minimum Tagging List or, ideally, tag against the full taxonomy. The Seahorse tag suggestions engine makes even full tagging an easy task. It automatically presents you with viable tag options, together with a confidence rating derived from the number of times each tag has been chosen for that particular concept by the community of accounting professionals now using Seahorse to convert their documents. Importantly, the streamlined off-line review process, including free-text explanatory notes, helps to ensure accurate representation of the accounts before final sign off and submission.
Don’t ignore the end of the ‘soft landing’ and leave everything to chance. Let Seahorse help you mitigate the new risks about to emerge.