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Are you ready for the change to iXBRL?

Are you ready for the change to iXBRL?

Contractor accountants and accountancy firms are not yet prepared for the new online filing system for corporation tax returns that HMRC is introducing next year.

The new system requires all data to be converted into iXBRL (in-line eXtensible Business Reporting Language) and the majority of online accountants, 92%, are undecided on how exactly to convert data into this format. iXBRL is meant to make the comparison of financial data easier.

Converting the data can be a time-consuming process and coupled with a lack of a formal relationship agreement could result in unplanned extra costs and a drain on resources next year.

Nearly a third of accountants submit corporation tax returns on behalf of clients based on information that has been produced by third parties. Of this information, 52% is submitted in paper format and 48% in pdf format, which is the least friendly of the iXBRL formats.

Earlier this month HMRC produced a list of software companies which can produce iXBRL technologies but only 3 out of the 20 companies listed can compile company accounts in the new format.

Companies such as Sage, claim the requisite software will be ready by November, but many experts believe this will be too late.

Donald Drysdale, the assistant director of Tax at ICAs said that HMRC needs to set out more clearly the requirements and how they can be met as half of the accountancy firms are having problems identifying the software package they need.

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Image: Chessboard by Robbert van der Steeg

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