Minimum tagging disappears with the arrival of the new FRS taxonomies

Since the introduction of HMRC’s iXBRL mandate in April 2011, the subject of minimum tagging has been the subject of considerable debate.

Back in early 2013 at the end of the so-called HMRC ‘soft landing’ period it was widely reported that HMRC’s published minimum tagging list, introduced alongside the April 2011 iXBRL mandate, would be abandoned in favour of full tagging of the accounts documents that accompany the CT600 form and computations. Many breathed a huge sigh of relief when that proved not to be the case.

Under UK GAAP and minimum tagging it was possible to tag using only a small subset of the full taxonomy, which, if done correctly, would allow the document to be accepted at the Government Gateway. Continue reading “Minimum tagging disappears with the arrival of the new FRS taxonomies”

UK Open Data gains momentum

In a significant move that will take UK open data to another level, Companies House, the UK Business Register, is planning to make available its entire digital data, free of charge, starting second quarter 2015. Once this service goes live, it will give the public access to the digital records of over 3 million companies.

Underlining further the growing importance of open data, the topic will take centre stage during the UK Government’s annual ICT Conference taking place on 13th January at the QE2 conference centre in London.

Continue reading “UK Open Data gains momentum”

‘Roll forward’ to 2015 with Seahorse iXBRL accounts filing

Customers often tell us that one of the most useful and time-saving aspects of our Seahorse® iXBRL conversion software is the ability to take an existing iXBRL filing and re-use it as the basis for another year’s filing, the so-called ‘roll-forward’ effect.

That’s really helpful to existing users, but what about new customers who have previously tagged accounts using a different system?

Continue reading “‘Roll forward’ to 2015 with Seahorse iXBRL accounts filing”

Open data becomes a reality

Open Data is a current hot topic. The UK government is committed to using digitisation to deliver more efficient public services. This week Companies House has announced that it will make its entire digital data available, free of charge, starting second quarter next year. In doing so, the UK will become the first country to create a truly open register of business information.  See the press release.

Companies House has already said that once the service goes live, the public will have free access to the digital records of over 3 million companies.

Since December 2013 Companies House has made newly received filings available online for free download. CoreFiling have packaged these up to provide a free search and query service with access to over 2 million iXBRL company accounts.

Access the CoreFiling service.

Detailed profit and loss tagging available in Seahorse

October was the start date for HMRC’s acceptance of filings in accordance with the new Detailed Profit and Loss (DPL) taxonomies.  The conversion of DPL financial statements to iXBRL won’t be mandatory immediately, as it applies to accounting periods ending only on or after 1st April 2014, so we may not see a deluge of filings for several months.

However, the good news is that Seahorse is there to help whenever you are ready to start filing.  The new DPL taxonomies for UK GAAP and IFRS have been incorporated into the latest release of the product, so you can begin submitting DPL statements in iXBRL right now, or at least know that Seahorse will be ready to help once you decide to start DPL filing.

HMRC have also published an informative User Guide on the DPL taxonomies which can be found at:  http://www.hmrc.gov.uk/softwaredevelopers/ct/dpl-guide.pdf

 

Detailed profit and loss tagging – get ready!

HMRC filers should be aware that Corporation Tax reporting is shortly going to change, with the additional tagging of Detailed Profit and Loss (DPL) statements.

As of October 2013, HMRC will accept submissions against the new DPL taxonomy that has recently been released. Mandatory reporting in line with DPL will, however, come into force for accounting periods ending only on or after 1st April 2014. It will be possible to tag the detailed profit and loss in either the computations or the accounts, but not both. If this happens inadvertently, the filing will still be accepted, but HMRC point out that “this may cause the return to come under further scrutiny, especially if there are inconsistencies with duplicate tagging across the accounts and computations”.

As always, CoreFiling are committed to keeping Seahorse users up to date, and we are already preparing to introduce the new DPL taxonomy into Seahorse at the earliest opportunity, so we’ll have it available for use well in advance of the due date.

Watch for more information shortly.

CoreFiling at the HMRC SME Expo

Last week CoreFiling took advantage of an invitation to attend the SME Innovation Expo 2013 in London, organised by HMRC in conjunction with Capgemini.  This high profile event gave an opportunity for small and medium IT suppliers to meet with a wide range of people from HMRC and other government departments.

CoreFiling was proud to be chosen to represent the SME community as one of only two companies profiled as ‘exemplars’ of effective working together with government.  During the morning plenary session we shared the platform with Skyscape for informal Q & A giving insight into how to work successfully with a government department, the impact it can have on the business and some of the challenges that SMEs face.  The role CoreFiling played in the invention and pioneering of iXBRL was also recognised during the presentations, which highlighted HMRC’s Company Tax filing project as the world’s largest, highly successful XBRL implementation.

The Keynote Speaker was Stephen Kelly, Chief Operating Officer at the Cabinet Office, who emphasised that under the Digital by Default agenda, there are excellent opportunities for SMEs to help drive efficiencies and offer cost-effective services.

Mark Hall, HMRC CIO, spoke about how HMRC is being transformed into a digital business, needing a different approach to delivering IT services.  Increasingly, this means using a new SME ecosystem that can meet the growing imperative for agility as well as a range of new products and services.  The key message was that:  “HMRC is open for business with SMEs.”

Bill Cook from Capgemini gave a talk about ‘Supporting the SME agenda within government’, which again emphasised the role that companies such as CoreFiling can now play within government IT and how this aligns with Capgemini’s role as a Solutions and Systems Integrator within the new HMRC structure.

During the afternoon, twelve SME organisations exhibited their products and services to delegates from government departments such as HMRC, Cabinet Office, DWP and Ministry of Justice.  CoreFiling and the other exemplar company, Skyscape, were on hand to discuss with other SMEs the keys to engaging successfully with government, and to market our own credentials to the visiting government departments.

This was an excellent, very well attended event.  It was heartening to see the government’s increasing commitment to the SME community.

End of HMRC’s ‘soft landing’ – no room for complacency

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.”

*http://www.hmrc.gov.uk/ct/ct-online/file-return/xbrl-tagging-120531.pdf

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.

Implications behind the end of HMRC’s ‘soft landing’

Much has been written about the end of HMRC’s ‘soft landing’, often promoting the common misconception that it just means the continuation of iXBRL tagging of accounts according to the Minimum Tagging List (MTL), rather than against the full taxonomy.

Whilst it is true that full tagging is not being mandated when the ‘soft landing’ expires at the end of March 2013, as was previously conjectured, there’s much more behind it.

Incorrect tagging is no longer an option

To quote HMRC: “… incorrect or missing tags may trigger HMRC’s risk-assessment rules – for example skewing one of our risk ratios – and this means there may be greater potential for post-submission contact from HMRC. That risk would be greater the less information from the minimum tagging list is tagged.”

The above statement dates from Mach 2011 and it is interesting to note that even at this early stage HMRC highlight the consequences of faulty tagging.  More recently (May 2012) HMRC issued a further statement declaring it would be:  “… continuing to expand the effective exploitation of XBRL, by quality assurance of XBRL tagging in a selection of returns already received and by development of the effective use of XBRL tags in risk assessment and other compliance work.”  This underlines the fact that HMRC intend to use the quality of XBRL tagging to apply greater scrutiny to a company’s accounts.

More tagging rather than less

It’s interesting to note that in the same statement HMRC also pinpoint the risks involved in minimal tagging.  The inference is that correctly applying a larger number of tags will actively help companies to avoid unwarranted scrutiny.  Completeness is the key.

How Seahorse® can help

With Seahorse you can take steps to ensure that your tagging does not put you under the spotlight.  The learning engine assists you in choosing the right tags to maintain tagging accuracy.  It presents you with tag suggestions derived from its cumulative knowledge of every tag chosen by all the professionals who have used it to tag individual concepts.  It’s been proven that these are not random suggestions, as the product has gained excellent results compared with others, and has reached up to a 99.9% pass rate at the HMRC Gateway.

Using Seahorse, you have the choice whether to apply full tagging or whether to use the Minimum Tagging List.

Whichever you choose, you can be sure that accuracy and transparency are assured.

 

What does the end of HMRC’s ‘soft landing’ really mean for filers?

When iXBRL tagging was first required for Corporation Tax filing and the ‘soft landing’ introduced to allow companies and accountancy firms to understand the new process, HMRC indicated that during the first two years they would exercise some leniency by not investigating companies solely on the basis of poor quality tagging.

However, it can be inferred from this statement that when the ‘soft landing’ does finally expire at the end of March 2013 there will be a tightening of the reporting regime with greater scrutiny and analysis of the tagging.

The need for accuracy and transparency

So, although tagging according to the Minimum Tagging List continues, contrary to what some had predicted, the main result of the expiry of the ‘soft landing’ transitional period will be the need to refocus on the accuracy of the tagging to avoid unnecessary HMRC investigations.

HMRC will expect companies to be transparent in their tax assessment; low quality or limited tagging could be taken as showing a lack of transparency.  After March 2013 it can be assumed that HMRC’s risk assessment procedures will be actively looking for anomalies that point towards potential issues.

What are the risks involved in incorrect tagging?

We expect HMRC to use exception-based reporting to identify companies that have ratios well outside the norms for their peer group.  If a company is applying incorrect tags to its financials, it is likely to come under the HMRC spotlight in the future.

Minimise the risks with Seahorse®

Using Seahorse companies can mitigate these risks and choose to tag according to the MTL or the full taxonomy.  Seahorse makes it easy and the learning engine simplifies the task of choosing the right tag.  Speed of tagging and accuracy are the watchwords.  We’ve recently seen figures from HMRC reporting that Seahorse reached a 99.9% pass rate at the Gateway, illustrating the accuracy of Seahorse tagging.

With Seahorse you and your clients are in very safe hands.