‘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”

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.

 

Countdown to the end of HMRC’s ‘soft landing’

Here is the first of a series of articles discussing the ramifications of the end of HMRC’s transitional ‘soft landing’ period.

Since April 2011 it has been mandatory to convert all UK Corporation Tax accounts data into the iXBRL (inline eXtensible Business Reporting Language) format prior to filing with HMRC.

Why was iXBRL introduced?

In common with many other taxation, banking and government regulatory bodies throughout the world, HMRC needed to take steps to tighten their monitoring of the financial affairs of the UK corporate world.  Given this imperative, HMRC recognised the value of introducing XBRL technology to streamline that process, to simplify financial investigation and analysis, and allow anomalies in financial reports to be highlighted more easily.

Why did HMRC introduce the ‘soft landing’?

As the move to iXBRL represented a radical change in the filing process, HMRC sought to make its new reporting regime more acceptable by introducing a two year transitional period, known as the ‘soft landing’.  This was designed to give companies, and the software vendors that service them, maximum opportunity to prepare for the changes.  However, this interim period expires at the end of March 2013.

Exactly what is the ‘soft landing’?

There are misunderstandings about what the ‘soft landing’ means for filers.   It was introduced as an interim step to allow companies to become familiar with the iXBRL tagging process.  HMRC’s main provision was that in the two years following the introduction of the iXBRL mandate they would not investigate organisations solely on the basis of poor quality tagging.

‘Soft landing’ versus the Minimum Tagging List

There has been much confusion about the ‘soft landing’ and its relationship to the Minimum Tagging List (MTL).

First of all, let’s look at the MTL.  Be aware that there are three levels at which iXBRL tagging can be applied:

  1. Tagging a minimum number of concepts:  there are 13 obligatory concepts that, if tagged correctly, will allow the filed accounts to pass the HMRC gateway.
  2. Tagging according to the Minimum Tagging List:  this contains around 1,300 tags available for use, though most companies will on average use around 100 different tags.
  3. Full tagging:  this offers the user up to 5,000 tags from which to choose.

Although HMRC recently announced that it will not be removing the MTL in favour of full tagging in 2013, as was originally expected to happen, the ‘soft landing’ itself will terminate at the end of March 2013.

How does this affect Seahorse®?

Seahorse, CoreFiling’s iXBRL accounts conversion system, covers all the options – and opportunities – that will arise, when the ‘soft landing’ ends.   From the starting point in April 2011, the product was fully ready for use, and over the past two years it has progressively been enhanced to give greater usability, time-savings and improvements to the accuracy of the tags being applied.  Unlike some competitive products, Seahorse has from the outset offered the opportunity to tag according to the MTL or to use the full UK GAAP and IFRS taxonomies, so users need have absolutely no cause for concern about the future.

Avoid an uncertain future by using Seahorse to tag your accounts.

iXBRL tagging efficiency by design

If you ask the majority of accountants what effect the second year of iXBRL tagging has had on their business, I imagine that most would respond that it’s still taking an inordinate amount of time and effort and that there’s no appreciable difference from the first year.

Contrast this with the experiences of Seahorse users.  Many have discovered that they now need less manpower to complete the conversion of their clients’ second year accounts because of the efficiencies built into the system.   Second year tagging is just so much simpler, faster and cost effective.

So, what makes the difference?  It’s all down to the Seahorse SaaS approach.

Firstly, there’s the ability to re-use tags from last year’s Word or Excel documents, so you don’t have to start again from scratch.  Seahorse indicates where tags have been reapplied as well as automatically making suggestions for any concepts appearing for the first time.

The SaaS approach also means that the suggestions are constantly improving, so you really do reap the reward of having a system that learns from the cumulative tagging decisions of all the accounting professionals who have used it to convert their documents.

Finally, it’s simply a much more agile way of ensuring that any changes to taxonomies or validation rules are implemented immediately and without fuss.  Since the mandate came into force there has been at least one corrective taxonomy release plus additional changes to the Gateway process, but as far as Seahorse is concerned any modifications are implemented in the ‘cloud’, so it all happens seamlessly.  There’s no new version of the software to download, and no impact on the tagging team.

So, with inbuilt tagging efficiency, constant improvements and an eye toward making things simpler to use, Seahorse is the perfect solution.

Less manpower, greater efficiency.  Why use anything else?

How automated is your re-use of last year’s iXBRL tagging decisions?

Speed up the tagging process in year two and the creation of filings for companies in the same corporate group.

Seahorse makes excellent use of existing tags.  It can re-use existing tagged documents as the basis for this year’s filings, even if those documents contain only a couple of similar pages and on the surface look rather different.  Seahorse is intelligent enough to recognise the matching pages and automatically re-uses the existing tags in the new document.  Remember that the rest of the document will then be automatically tagged, leaving you just to confirm the confidence-rated suggestions.  It will certainly save you time and give you much higher quality documents.

Seahorse, the automatic choice.

Vast amount of iXBRL tagging knowledge at your fingertips

Seahorse’s learning engine has accumulated an abundance of iXBRL tagging knowledge distilled from the thousands of Word and Excel accounts uploaded to our cloud-based system since the start of the HMRC mandate.

Why is this important?

It means that Seahorse’s tagging suggestions are constantly refined in line with our clients’ professional accounting expertise.  You benefit from more confident suggestions to help you review and confirm the appropriate tags.  It’s quick, easy and accurate.

Get the Seahorse advantage for your business!