iXBRL - your views please

Charities which do not pay corporation tax will not need to submit a corporation tax return and will not be involved with iXBRL at all.

Those which do need to pay the tax may find that the HMRC free filing product will be all they need. HMRC's software, which is a downloadable PDF, covers the CT600 (Short) return form and the following supplementary pages:

• CT600A (Loans to participators by close companies)
• CT600E (Charities and Community Amateur Sports Clubs)
• CT600J (Disclosure of tax avoidance schemes)

Entities which don't need to prepare accounts under the Companies Act or certain other specific legislation - See HMRC Directions published under regulations 3 and 10 of the Income and Corporation Taxes (Electronic Communications) Regulations 2003 (SI 2003/282) - can continue to send their accounts in PDF format. These will include unincorporated organisations and some charities. But these entities must send any tax computations in iXBRL format.

> But these entities must send any tax computations in iXBRL format.

The tax computations are much less of an issue than the accounts themselves. If you already use corporation tax software to do the CT600 and computations, expect your existing software product to be upgraded to provide an iXBRL output well in advance of the April 2011 deadline. The HMRC website has a page showing software products that have been tested by them, and several products are already listed as providing iXBRL output for computations, and we expect others to show 'yes' in that column over the coming months. iXBRL accounts production is a different matter: as of today, there is still only one product listed.

If you have a trading company that gift aids its profits across to your charity note that HMRC's software does not work for the trading company since it does not cater for Box 35 on CT600 (short). 

For small companies that have been filing simple excel based computations and accounts the need to file ixbrl involves significant additional expense since it appears the options are either to buy a software package to do it in house or pay a service bureau (try your auditors) to do it for you.  As Paul says there are lists on hmrc website.

Unless anyone can give me another solution?

I have mentioned this to a contact at CTG to see whether anyone else has complained but not heard anything back yet.  Is this something small charities are just quietly swallowing?

@Jane

I raised the ‘Box 35’ issue with HMRC a few months ago. The answer was to the effect that HMRC’s free-of-charge CT filing system is meant to cater for ‘small companies and organisations with straightforward Corporation Tax affairs’ and that it had been developed at minimal cost to the taxpayer by keeping it as simple as possible for the maximum number of potential users. Adding just one extra box on the CT600 would not be as simple as you might think, as it would entail another page and a number of adjustments to what is there already, including links from Box 35 to the computations template and changes to the validation checks. I can certainly relate to that, as it often happens that seemingly simple changes to IT systems turn out to be surprisingly complicated and expensive. The answer was not blank a ‘no, we can’t/won’t do it’ but rather on the lines that they would have to consider carefully which changes should be prioritised, given their limited budget.

Meanwhile, I’m afraid the answer is paid-for software (or outsource). But it might be worth mentioning some of the relatively inexpensive CT and accounts production products on the market. Here’s a brief summary:

Accounts production software

Some of the most likely suppliers to suit your needs would be:

· VT Software. Their main focus is on smaller practices; and their package is well regarded by its users (it has been highly rated in the IT Faculty's surveys of IT in Accountancy Practices). I understand they charge £199 for the first year and £150 per year thereafter. They do not do a corporation tax package (that completes and files the CT600), so you would have to go elsewhere for that.

· Another possibility is Absolute Software, who, according to their website, charge £100 for a licence for up to 10 companies – and they also do corporation tax software (£75 for up to 25 filings).

· A further possibility would be Forbes Computer Systems, who also supply both accounts production and CT software, but it appears from their website is a little more expensive.

Conversion  or ‘tagging’ software

See the last list on the HMRC page quoted in my earlier comment, above. That includes VT (already mentioned) and several others, including Corefiling /UNIT4/IRIS (the same product from three different suppliers). Here you feed in your existing Word accounts, and the software generates (with a bit of question-and-answer with you) an iXBRL file. With Corefiling, you just pay per set of accounts. It might also be worth looking at TaxCalc iXBRL Conversion Service, which starts at £25 for a single set of accounts. Although it is described as a ‘service’ it appears that it is in fact an electronic service that starts with a simple Excel template. If your accounts are simple enough, it might be suitable. They show you what their template looks like, here.

Corporation Tax software

Finally, if you cannot use HMRC’s free service, you would have to buy software to complete and file the CT600 (plus attached accounts and computations). TaxCalc and Absolute would be among the cheaper options. It is also worth mentioning that TaxCalc achieved a good rating in our latest IT in Accountancy Practices survey.

These lists are not meant to be exhaustive and do not constitute an ICAEW recommendation. In any case, you should check directly with the suppliers that the software will meet your specific needs (in this instance, Box 35!). Some of these suppliers offer free downloads of trial versions of their software. More comprehensive lists are available on HMRC’s site, as mentioned in my earlier comment.

Paul Booth, IT Faculty