XBRL in the UK - new rules for online filing

From 31 March 2011 it will be compulsory for businesses to file their company tax returns online and to make corporation tax payments electronically.  All online filing will have to be done using Extensible Business Reporting Language (XBRL).

What is XBRL?

XBRL is a standardised computer readable language designed to enhance the electronic communication and analysis of business information.

To prepare for the new rules company management will need to consider:

• Who, within the company, will be responsible for addressing the change management aspects of responding to the new regulation?
• How many tax returns and company financial statements are affected by the change?
• To what extent is existing tax software XBRL enabled and what are existing providers of tax software doing to meet the new standard?
• To what extent is existing software used in the production of company financial statements XBRL enabled? 
• Who will conduct the work to tag financial information in the tax return and the financial statements?
• How will any judgements necessary in the tagging of the financial information be identified, considered and resolved?
• What processes and controls over the use of XBRL should be introduced?
• What level of testing of the XBRL tagging will be appropriate?
• How might the XBRL tagging of tax returns and company financial statements be harnessed to deliver benefits in the quality of information provided to management?

The electronic filing and use of XBRL will be mandatory and unless companies take action to implement XBRL they will not be in a position to file corporation tax returns when the rule is enacted.

How PwC can help

PwC has already developed and successfully piloted e-filing solutions for the submission of tax calculations to HMRC. 

Our teams have extensive experience of advising on change programs prompted by new tax and financial regulation and has been closely linked with the development of XBRL. 

We have also started to develop and review inline XBRL software for tax calculations and company financial statements, which is to be ready for use in 2011 and have practical experience in tagging financial information using XBRL and in structuring engagements to helping clients with their tax compliance.

Read more about online filing and XBRL on PwCPlus.