Government to press ahead with new company accounts filing system

The Treasury has decided to keep to its timetable for the introduction of a new system for the filing of company accounts. This is despite the fact that a number of tax bodies have written to the Government urging a delay.

The new system, which uses the iXBRL computer language, is due to come into effect as from 1 April 2011. Under the changes, all company tax returns sent in from April 2011 must be filed online for accounting periods ending after 31 March 2010 and in the Inline XBRL or iXBRL format. Corporation tax payments must likewise be made electronically from April 2011.

A number of leading accountancy and professional tax bodies recently wrote to David Gauke, the Exchequer Secretary, putting the case for a postponement in the implementation of the new system. In his reply, the Minister reiterated plans to continue with both the introduction and the timetable.

He did, however, promise that HM Revenue and Customs (HMRC) will take an understanding approach during the initial stages of the new system. Companies that make reasonable errors in their corporation tax submissions will not face any penalties.

Anthony Thomas, deputy president of the Chartered Institute of Taxation (CIOT), commented: “This decision will come as a blow to some businesses who are struggling with implementation due to the insufficiency of time between software arriving and the legislation commencing on 1 April 2011.

“However, I welcome the minister’s recognition that there will be a soft landing for the changes, with HMRC ‘sympathetic to any difficulties caused by lack of familiarity with new software or delays in receiving software.’ This is a positive step.”

HMRC have said that they will be particularly sympathetic in the first two years: “For returns submitted and accepted, we will not penalise missing or incorrect tagging. There is no legal provision for such a penalty unless the errors have led to a loss of tax.”

Please don’t forget that we are here to help make sure your company is able to comply with the new rules.