{"id":1630,"date":"2020-04-02T18:00:53","date_gmt":"2020-04-02T18:00:53","guid":{"rendered":"https:\/\/prathamconsult.com\/uk\/?page_id=1630"},"modified":"2023-04-24T05:50:49","modified_gmt":"2023-04-24T05:50:49","slug":"faq","status":"publish","type":"page","link":"https:\/\/prathamconsult.com\/uk\/faq\/","title":{"rendered":"FAQ"},"content":{"rendered":"\t\t
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UNITED KINGDOM<\/u><\/strong><\/span><\/p>

URL:1 <\/strong>https:\/\/www.gov.uk\/government\/publications\/xbrl-guide-for-uk-businesses\/xbrl-guide-for-uk-businesses<\/a><\/span><\/p>

XBRL guide for businesses<\/strong><\/span><\/p>

1 Introduction<\/strong><\/span><\/p>

This document is aimed at business users of\u00a0XBRL. This includes businesses that file financial data in Inline\u00a0XBRL\u00a0(iXBRL) and accounting firms that advise them or prepare reports on their behalf.<\/span><\/p>

It will help companies to understand the implications of the use of\u00a0iXBRL\u00a0for filing of Company Tax Returns to\u00a0HMRC\u00a0and accounts to Companies House.<\/span><\/p>

Legislation, which came into force on 1 January 2010, means that it is compulsory for companies to send their Company Tax Returns online using\u00a0iXBRL\u00a0for accounts and computations. It is no longer acceptable for most companies to send either the accounts or computations on paper or as a Portable Document Format (PDF) attachment to an online return. Unincorporated charities, clubs and societies may use either\u00a0iXBRL\u00a0or\u00a0PDF\u00a0for their accounts, but any computations must be in\u00a0iXBRL\u00a0format. The new requirements are effective for returns delivered on or after 1 April 2011, for any accounting periods ending after 31 March 2010.<\/span><\/p>

As a transitional measure small charities will be able to file accounts in either\u00a0PDF\u00a0or\u00a0iXBRL. Any computations must be in\u00a0iXBRL\u00a0format.<\/span><\/p>

HMRC\u00a0and Companies House provide a free Corporation Tax online service for small unrepresented companies with relatively straightforward financial affairs. It includes specially formatted accounts and computations templates which if used will make sure data is submitted in\u00a0iXBRL\u00a0format.<\/span><\/p>

Read about who can and who cannot use the\u00a0Corporation Tax online filing service<\/a>.<\/span><\/p>

Companies must also make Corporation Tax payments and related payments electronically from 1 April 2011. Related payments include interest charged on overdue Corporation Tax and penalties for not filing Company Tax Returns on time.<\/span><\/p>

Most companies will not have to take special steps to convert accounts or computations into\u00a0iXBRL\u00a0themselves. This will be done automatically by commercially available final accounts production (FAP) or tax preparation software. However,\u00a0FAP\u00a0and conversation software users may have to do some manual tagging initially to expand on the automatic tagging provided by the software.<\/span><\/p>

Many larger organisations produce their accounts and tax computations using a word processor or spreadsheet programme; they don\u2019t use\u00a0FAP\u00a0software. They can continue to do this, if they choose, but they\u2019ll need to insert\u00a0XBRL\u00a0tags and convert the documents\/spreadsheets into an\u00a0iXBRL\u00a0file using conversion software and file as part of their Company Tax Return.<\/span><\/p>

This guide explains these issues. Further information on\u00a0XBRL\u00a0is widely available on the internet and in printed publications. In particular, the\u00a0XBRL\u00a0UK and\u00a0XBRL\u00a0International websites provide general introductions to\u00a0XBRL\u00a0as well as technical information.<\/span><\/p>

\u00a0<\/p>

2 XBRL\u00a0– the basics<\/strong><\/span><\/p>

2.1\u00a0What\u00a0XBRL\/iXBRL\u00a0is<\/strong><\/span><\/p>

XBRL\u00a0involves the application of computer-readable tags to business data. This enables the data to be processed automatically by software, bringing great gains in efficiency and providing an opportunity for high quality analysis of business information.<\/span><\/p>

A company\u2019s financial statements, which have been converted into Inline\u00a0XBRL\u00a0(iXBRL), may appear unchanged to a human reader, but they will contain tags, usually hidden to the eye, which can be accessed and used by software.\u00a0XBRL\u00a0can provide an identifying tag for each individual item of business data. For example, \u2018operating profit\u2019 has its own unique tag, as does \u2018current assets\u2019.<\/span><\/p>

The use of\u00a0XBRL\u00a0for filing accounts in the UK is not new. Companies House has been accepting abbreviated and dormant accounts from audit exempt companies in\u00a0XBRL\u00a0for a number of years using a simple, template-driven system. Many hundreds of thousands of accounts have already been filed in this way.<\/span><\/p>

Many types of software and data systems have been applying computer-readable tags to financial data for years. However, these have been defined differently for each purpose and each type of software. Tags in one system were meaningless to another. No generic processing of the data was possible.<\/span><\/p>

XBRL\u00a0is different. It is a world-wide standard, developed by an international, non-profitmaking consortium,\u00a0XBRL\u00a0International Inc. (XII). XII is made up of many hundred members, including government agencies, accounting firms, software companies, large and small corporations, academics and business reporting experts. XII has agreed the basic specifications which define how\u00a0XBRL\u00a0works.<\/span><\/p>

Clearly, different countries use different accounting standards. Reporting under each standard reflects differing definitions. The\u00a0XBRL\u00a0language uses different dictionaries, known as \u2018taxonomies\u2019, to define the specific tags used for each standard. Different dictionaries may be defined for different purposes and types of reporting. A special taxonomy, the Global Ledger or GL Taxonomy, is intended to enable the efficient handling of financial and business information, at a transactional level, contained within an organisation.<\/span><\/p>

In the UK, three main taxonomies will be used for company reporting: Financial Reporting Council (FRC) Taxonomy set for accounts, the Corporation Tax or \u2018CT\u2019 Computational Taxonomy to for tax computations and the Detailed Profit and Loss taxonomy for detailed profit and loss statements that are attached to the accounts or computations.<\/span><\/p>

The\u00a0XBRL\u00a0format being used in the UK for company reporting is known as Inline\u00a0XBRL\u00a0or\u00a0iXBRL. This consists of a human-readable report, which has\u00a0XBRL\u00a0tags embedded in it. The human readable text is effectively HTML – the basic language of the web. The web file contains the\u00a0XBRL\u00a0tags, but they are usually hidden and are only displayed to human eyes when required by software – for example during a process to check the tags.\u00a0<\/span><\/p>

2.2\u00a0How\u00a0iXBRL\u00a0is being used in the UK<\/strong><\/span><\/p>

The legislation means that most companies must file their Company Tax Returns, including financial accounts and computations in\u00a0iXBRL\u00a0from 1 April 2011, for accounting periods after 31 March 2010.<\/span><\/p>

On 1 September 2009,\u00a0HMRC\u00a0and Companies House issued a statement announcing a common approach to the online filing of company accounts that would enable both organisations to receive accounts in\u00a0iXBRL\u00a0format.\u00a0HMRC\u00a0and Companies House introduced a joint filing service for company accounts in October 2010. The service, enables most small companies with relatively straightforward financial affairs, to submit their company accounts online to both organisations using a \u2018one stop\u2019 online facility.<\/span><\/p>

This guide explains how businesses can convert what they have to file as part of their Company Tax Return into\u00a0iXBRL. For some, conversion into\u00a0iXBRL\u00a0may be achieved automatically by final accounts production (FAP) or tax preparation software, or by using the\u00a0HMRC\u00a0service. However,\u00a0FAP\u00a0or conversion software users are likely to have to do some manual tagging to expand on the automatic tagging provided by their software.<\/span><\/p>

2.3\u00a0What the benefits of\u00a0iXBRL\u00a0are<\/strong><\/span><\/p>

The introduction of\u00a0XBRL\u00a0tags enables automated processing of business information by computer software, cutting out laborious and costly processes of manual re-entry and comparison. Computers can treat\u00a0XBRL\u00a0data \u2018intelligently\u2019: They can recognise the information in a\u00a0XBRL\u00a0document, select it, analyse it, store it, exchange it with other computers and present it automatically in a variety of ways for users.\u00a0XBRL\u00a0greatly increases the speed of handling of financial data, reduces the chance of error and permits automatic checking of information.<\/span><\/p>

Inline\u00a0XBRL\u00a0(iXBRL) offers additional benefits as it presents\u00a0XBRL\u00a0data in a human readable form, either on screen or in printed output. It also enables the author\u2019s branding and layout to be maintained so that the recipient can view the same document the author created, whilst the computer can \u2018intelligently\u2019 recognise the embedded\u00a0XBRL\u00a0tags.<\/span><\/p>

HMRC\u00a0will benefit from much more effective analysis software, cutting out unnecessary queries and helping to deliver better automated risk assessment so they can focus resources on businesses where the compliance risks are greatest. In addition\u00a0HMRC\u00a0and Companies House will achieve major improvements in the speed and efficiency with which they handle business data. Both will cut out manual processes and handling of paper.<\/span><\/p>

As\u00a0iXBRL\u00a0becomes established, many companies may find that they can benefit from using\u00a0XBRL\u00a0to improve internal processes.\u00a0XBRL\u00a0has many potential benefits for businesses. By upgrading systems to utilise\u00a0XBRL\u00a0they can streamline and automate their methods for collecting, assembling, monitoring and reporting business data across their whole operation. They should be able to integrate disparate data systems. They can also turn internal management reporting and external reporting into processes which are fast, efficient and cost-effective.<\/span><\/p>

Companies may want to discuss the exploitation of these benefits with their accountants and software and system providers. Consumers of financial data, including banks and other financial institutions, investors and analysts, can receive, find, compare and analyse data much more rapidly and efficiently if it is in\u00a0XBRL\u00a0or\u00a0iXBRL\u00a0format.<\/span><\/p>

3\u00a0iXBRL\u00a0Reporting – How it impacts your Business<\/strong><\/span><\/p>

3.1\u00a0Basic Principles<\/strong><\/span><\/p>

iXBRL\u00a0is purely concerned with the introduction of computer-readable\u00a0XBRL\u00a0tags into business reports to enable automated handling of financial data. It should not otherwise change the nature and content of company business reports. That continues to be determined by individual companies in the light of accounting principles, company law etc.<\/span><\/p>

Those who read business reports in\u00a0iXBRL\u00a0need not be aware of the existence of\u00a0XBRL\u00a0tags. They may see some changes in the way the user interface of such software works, but the creation of the\u00a0XBRL\u00a0tags will be hidden.<\/span><\/p>

This chapter looks at the impact of\u00a0iXBRL\u00a0reporting on different types of companies.<\/span><\/p>

3.2\u00a0Small companies with simple accounts who do not use accounting software<\/strong><\/span><\/p>

HMRC\u00a0provides a free Corporation Tax online service that can be used by most small unrepresented companies with relatively straightforward financial affairs to file their Company Tax Returns online. It includes specially formatted accounts and computations templates which if used will make sure data is submitted in the right format.<\/span><\/p>

Read about who can and who cannot use the\u00a0Corporation Tax online filing service<\/a>.<\/span><\/p>

HMRC\u00a0and Companies House also provide an optional joint filing service that enables small companies to enter their accounts data once. The service can be used to submit full or micro entity accounts over the Internet to\u00a0HMRC\u00a0as part of the Company Tax Return and also to send these – or an abridged version – to Companies House. If a company\u2019s financial reports contain data not catered for in the template provided, then the company won\u2019t be able to use it.<\/span><\/p>

Companies will need to register to use the\u00a0HMRC\u00a0Corporation Tax Online Service to submit their returns online whatever service or software they choose to use. An activation code will be posted out that can take up to seven days to arrive so companies are advised to register early.<\/span><\/p>

Read about how to register and use the\u00a0HMRC\u00a0Corporation Tax Online service<\/a>.<\/span><\/p>

3.3\u00a0Companies using final accounts production and tax preparation software<\/strong><\/span><\/p>

Companies should talk to their commercial software provider or supplier to make sure that the product offered meets their needs and allows them to deliver a fully compliant Company Tax Return.<\/span><\/p>

HMRC\u00a0publishes a list of software companies who have successfully tested their products with them and provided evidence that they have either developed software or manage a service (or both) that can produce one or more elements of a Company Tax Return. Inclusion in the list does not imply any judgement by\u00a0HMRC\u00a0on the general quality of the software; it simply indicates that the software meets certain basic criteria including producing technically valid\u00a0iXBRL\u00a0output.<\/span><\/p>

Companies and accountants should consider what processes to follow if accounts and tax computations are produced at different times, possibly by different individuals or firms. Since both accounts and computations must eventually be filed in\u00a0iXBRL, it may be sensible to make sure accounts and computations are produced in\u00a0iXBRL\u00a0when first completed, rather than trying to convert them at a later date. However, it is up to companies and accountants to determine what processes to follow in the light of their circumstances. As discussed below, it is the responsibility of companies to make sure they comply with statutory filing requirements.<\/span><\/p>

3.4\u00a0Companies creating accounts or computations through manual processes<\/strong><\/span><\/p>

Large companies, among others, may create their accounts and other reports using Excel, Word or similar text-based software. These companies may elect to integrate final accounts preparation software into their systems and processes. Alternatively they have two options for converting their data into\u00a0iXBRL\u00a0format:<\/span><\/p>