Parliamentary Search

Written question asked by Baroness Noakes (Conservative), in the House of Lords. It was answered by Lord McKenzie of Luton (Labour) on Tuesday, 2 May 2006.

Taxation: Company Returns

Question
Further to the Written Answer by the Lord McKenzie of Luton on 18 April (WA 220), whether they (a) have accepted the recommendation in the report HMRC Online Services that the XBRL computer language should be used for the filing of company tax returns; (b) have considered the degree to which XBRL is currently used by businesses of all sizes; (c) have considered the additional costs to businesses of all sizes of being required to use XBRL; (d) have compared the relative costs and merits of XBRL with alternative methods of company tax return filing from the perspective of the companies which will be affected; and (e) consider that the partial regulatory impact assessment issued by HM Revenue and Customs on 22 March adequately deals with the costs and burdens associated with the compulsory use of XBRL.
Answer

(a) The Government announced on Budget day that they accepted Lord Carter’s recommendations and that, subject to the right systems being in place, companies would be required to file online using XBRL from April 2010. (b) XBRL is being developed by an international non-profit consortium of approximately 450 major companies, organisations and government agencies. XBRL is already being put to practical use in a number of countries and its use is growing rapidly around the world. (c) XBRL is a technical coding system which would be largely invisible to the product user. The majority of company accounts and computations are already prepared using software packages. HMRC does not expect the cost of software packages to be significantly increased by the incorporation of XBRL because of market pressures and because this is functionality that software providers are already developing. Lord Carter’s recommendation will help to drive that development. (d) HMRC does not anticipate that use of XBRL will involve additional cost or burden for companies. XBRL is designed to streamline financial reporting at all stages, from the point where individual financial transactions take place and are recorded by a company’s business software systems, through to audit and accounts preparation processes, and on to tax and regulatory reporting. There is no competing standard for financial reporting. The potential benefits of XBRL to small businesses were recognised by the ACCA in 2004 in its paper Using information and communication technologies to reduce the compliance burdens faced by small businesses—A Proposal by ACCA. (e) HMRC will be working with representative bodies on the detailed implementation of Lord Carter’s recommendations, and comments have been invited on the estimated costs and benefits identified in the partial RIA.

Secondary information

Type
Written question
Reference
5221; 681 c61WA
Session
2005-06
Related items
Taxation: Company Returns
Tuesday, 18 April 2006
Written questions
House of Lords
Subjects
Software Costs Business Internet Electronic government Revenue and Customs Taxation Impact assessments
Link
View this Written question on www.publications.parliament.uk