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HMRC accept electronically filed corporation tax returns using a combination of technologies. The tax return and supplementary pages are submitted using XML whilst the accounts and the tax computation are attached to the main return as PDF documents. This is essentially the same technology used to submit self assessment tax returns.
However a key difference between an individual self assessment return and a corporation tax return is that the accounts and the computation are legally part of the return. These attachments also contain the detail necessary to interpret the CT600 which only shows summary results and calculations.
PDF documents are advantageous because they recreate the computation or accounts in a format that is easily distributed due to a number of free readers being available. This means the client or the inspector can open the document and view the contents. However it is very difficult to extract data from a PDF document as the information is not sufficiently structured in the underlying code.
This meant HMRC had to find a solution to extract information without compromising the ability of users to read it either electronically or in its printed form.
XBRL or eXtensible Business Reporting Language is a globally accepted language for describing financial statements and transactions. It has been in existence for nearly 10 years and its usage is growing across the world. The USA is the leading adopter of XBRL where they already use it for SEC filings.
At its core are a series of ‘taxonomies’, these state the labels or tags that need to be applied to the contents of the document so that the data can be understood by computer systems. These are embedded into the underlying code and aren’t visible tags for the user reading the document.
Of course, this only solves half of the issue as it is still necessary for users to read the document without having to interpret the XBRL tags. Inline XBRL (or iXBRL) resolves the second half of the problem.
iXBRL may sound new and complicated, but taken in context iXBRL is simply a viewable document which isn’t miles away from a PDF. The main difference is that unlike a PDF file, you view it in your browser rather than a dedicated PDF reader. This also removes any issues with having the latest compatible version of a PDF reader. Importantly, transforming your tax computation or accounts into this format is, for the most part, the concern of the software houses.
The International Accounting Standards Board have published the following sample set of accounts: