Q&A with the Southampton Echo

Question
Will iXBRL be a disaster or another Millennium Bug?

Answer
You may have noticed that the press are starting to pick up on the new HMRC tax software for company tax returns that is being introduced on 1 April. Various national publications, noting recent lobbying attempts by professional bodies such as the Chartered Institute of Taxation, have proclaimed that this is a disaster waiting to happen. No one, apparently, is ready. David Gauke MP, in his role as Exchequer Secretary to the Treasury, is the man with the final say and two weeks ago, confirmed that the implementation would carry on as planned.

So, what is the truth? Will it be the disaster that many are forecasting? Probably not.

Many commercial software providers have invested millions in ensuring their software used for producing accounts is ready. Similarly, most firms of accountants have been planning their strategy for dealing with the change for months. In short, if you are a company that has your accounts and tax return prepared by a firm of accountants, you should be okay. It is likely that those that will be hardest hit are the small companies, with fewer available resources, that currently prepare their accounts in a Microsoft Word of Excel format and those sole practitioners, unable or unwilling to invest in the new software on the market.

Is that fair, should the small be penalised? Again, probably not. What should be pointed out though is that HMRC have introduced a ‘smart PDF’ program for small companies (and practitioners) in which to complete their tax returns.

Mark Munro is a Manager in the Southampton office of accountants and business advisers James Cowper. Mark can be reached by email: mmunro@jamescowper.co.uk For more information visit www.jamescowper.co.uk.