Company

Inline XBRL Guide

Since April 2011, UK companies have been required to file Corporation Tax returns in Inline XBRL format with UK HMRC. Tax filers have been well-served by their software and service providers, as well as HMRC guidance. However, some companies might be unclear regarding certain aspects of this new process. This document seeks to address that issue. In order to better understand HMRC's requirements for Inline XBRL filings, a better understanding of the overall process is warranted. The diagram below provides an overview of the key steps.

 

What do I need to tag?

The first step in XBRL tagging is to determine the applicable taxonomy. If your company's accounts are based on UK-GAAP or UK-IFRS, HMRC expects you to create the Inline XBRL document using the corresponding taxonomy for each accounting standard. Additionally, other taxonomies such as the Computations taxonomy are also important as this is used to tag your tax computation data. It would be useful to learn more about XBRL and also understand how to read and review taxonomies.

Why do my Inline XBRL document not look like my company's annual report?

HMRC expects you to provide your company's financials or annual report in the Inline XBRL (iXBRL) format. HMRC have provided specific formatting guidelines that all iXBRL products and service providers have to follow. You can view details of all the taxonomies that HMRC expects filers to use at http://www.hmrc.gov.uk/ct/ct-returns-formataccs.pdf. Some service providers, like Ez-XBRL, will be able to provide a format that is a very close match to the original.

Many line items in my financials are not tagged. Why?

The types of data that can be tagged from a company's financials are dependent upon the "tag set" that your company has decided to use. HMRC has allowed companies to either use the Minimum Tag Set or the Full Tag Set when they file in iXBRL for the first time. The Minimum Tag Set contains fewer tags and, therefore, many line items that may appear within a company's financials might not have a corresponding iXBRL tag available in the tag set. These may be available in the Full Tag Set. Another reason for line items not being tagged is that the current versions of the taxonomies may not contain a tag for the specific accounting concept being reported. HMRC's advice to all filers is to tag using only the available concepts from the corresponding taxonomies and the tag set a company chooses. Consequently, there may be gaps in items begin tagged.

What is the Minimum Tag Set? What are the HMRC's rules regarding this?

HMRC has published "minimum tagging lists" for each of the three main taxonomies – UK GAAP, UK IFRS and Corporation Tax Computations. Each of these lists contains a reduced number of tags and they have been specifically designed to ease the process of introducing iXBRL tagging to UK corporation tax filers. The Minimum Tag Set is expected to continue indefinitely, although the list of tags may change from time to time. Many software products, such as Ez-iXBRL, specifically colour code tags in the Minimum Tag Set, thereby making them easier to identify. Some products even let you completely hide the additional tags if these are not required for your tagging requirements.

How do I review my service provider's iXBRL tag selections?

Even if you choose a service provider for iXBRL creation purposes, ultimately, each company is responsible for its iXBRL filings to HMRC. Consequently, it is necessary for companies to, at the very least, review the XBRL tags that have been selected by their service provider. Service providers have different methods for sharing this information. Some companies simply provide an iXBRL tagged document which can then be viewed in a web browser using special "addon" software for viewing iXBRL tagged data. Others provide Microsoft Excel worksheets that contain details of iXBRL tags selected by the services team for each financial concept that the company has reported. In either case, the company should review the tags selected and, if required, request clarifications for "missing items" or financials that may appear to have been tagged correctly.

Can my company benefit from Inline XBRL? Or is this just another government mandate?

Inline XBRL – and XBRL in general – contains numerous features that can help a company with its in-house reporting and analytical needs. iXBRL documents are richer than traditional documents as they contain both a formatted, viewable document, as well as richer XBRL "tags" that contain descriptions for each concept. XBRL tags also enable companies to perform powerful in-house data roll-ups and create dashboards that assemble data from disparate sources. Think of company branches, divisions and subsidiaries that use the same descriptors (XBRL tag) to describe accounting concepts that are essentially the same, although they may differ slightly in their naming conventions.

Will I be able to create Inline XBRL filings in-house?

Yes, you can. Many accounting and accounts production software products are enabling the creation of iXBRL documents. It is important to note, however, that accounts are only a part of the document set required to be filed to complete the HMRC's corporation tax filing process. Another key element is the iXBRL tagging of tax computations. Many accounting software products do not create tagged tax computations. However, many newer products are appearing in the market that will eventually enable the entire process described in the initial diagram to be completed very easily, and be accomplished by your in-house team.

What types of products are available?

There are a variety of software products available for Inline XBRL. These include accounting and accounts production packages, tax computation software, PC-based iXBRL software and online, web-based iXBRL packages. If your company is small, HMRC has a free, web-based form that can be used for creating and filing iXBRL tax returns. More information regarding available software products recognised by HMRC is available at Corporation Tax Online – software and online forms.

How do I evaluate a service provider's XBRL capabilities?

One of the key considerations is to ask the service provider to provide a sample set of documents, including those used for interim review purposes. Additionally, you should definitely investigate whether the company is active in other markets besides the UK. The UK taxonomies and iXBRL standards are constantly evolving based on the worldwide direction of XBRL-based reporting. Consequently, a provider with a wider range of experience is better positioned to address new tags that may appear in future versions of taxonomies. Additionally, you should also request the service provider to provide a detailed description of their process. Many service providers have not completed the entire process (from tagging to e-filing) and there may be pitfalls which you should be aware of. Imagine if today was your filing deadline and you encountered a problem while trying to file which your service provider is not able to resolve. Likewise, also evaluate the responsiveness and availability of the service provider's personnel to communicate with you and respond to your questions.