iXBRL Update - The impact on charities

HMRC recently issued a statement to confirm that they have no plans to defer the deadline for certain organisations to file their annual financial statements and tax computations online using iXBRL (Inline Extensible Business Reporting Language).

A request to defer the deadline

As we outlined in our Insight last year, HMRC stated that financial statements and tax computations that are filed with their Corporation Tax Return after 31 March 2011 must use iXBRL.

Service providers have been slow to roll out software that is capable of converting these documents to iXBRL. This prompted a number of advisers and accounting bodies to request that HMRC defer the deadline for iXBRL filing in order to give companies and advisers sufficient time to implement iXBRL tagging software and procedures.

 However, HMRC has assured tax advisers that any difficulty with filing will be treated sympathetically if they have taken "reasonable steps to comply".

What does this mean for charities?

For charities this will mean that trading subsidiaries will be required to file iXBRL compliant financial statements after 31 March 2011.

In addition, iXBRL will impact on those charities required by HMRC to file a corporation tax return. Those with combined income of less than £6.5million will fall under transitional arrangements which will allow them to continue to file financial statements in a PDF format with their corporation tax return. However, those with combined income in excess of £6.5million will be required to file using iXBRL.

iXBRL will not impact on charities that are not required to file tax returns or file a tax return under income tax self assessment (this will include unincorporated charitable trusts).

In readiness for iXBRL and following the recent release of new software, we are testing the different software options available in order to identify the most cost-effective and efficient solutions to meet this additional regulatory requirement.

If you have any questions or concerns regarding iXBRL please do not hesitate to contact your usual Buzzacott contact, or email enquries@buzzacott.co.uk.