Institutes defend their actions over iXBRL lobbying

TAX BODIES have been criticised for failing to take action sooner to delay incoming tax technology.

Following the recent announcement the government was going ahead as planned for new technology to be used on tax filing, there have been mutterings that the institutes did too little, too late, to effectively lobby for a delay.

Social networking site Twitter saw disapproval directed towards the institutes for failing to take serious steps in requesting a delay quicker.

From 1 April all corporation tax submissions must be filed to HMRC using the new technology iXBRL (inline eXtensible Business Reporting Language).

Five of the main institutes wrote to the exchequer secretary to the Treasury, David Gauke, requesting the government push back the implementation deadline by six months. The request was rejected earlier this week.

The institutes have defended themselves over their efforts, saying they have been working behind the scenes for years, and the letter to Gauke was a small part of their action on the issue.

According to the tax bodies, they have been in discussions with HMRC and software suppliers for at least two years.

Concerns over iXBRL came to a head in January this year, when news broke that one of the largest IT companies, Sage, was delaying its full updated version of iXBRL. The situation was further exasperated by members complaining about teething problems with other software providers’ products. At that point the institutes collectively wrote to Gauke.

The tax bodies also found themselves caught in a balancing act according to CIoT’s technical director of tax Tina Riches, which prevented them from opposing the deadline too much.

There was concern that if the institutes contested the deadline, and were able to push back the date, software suppliers would fail to invest and produce products quickly enough. Then regardless of what year the implementation began IT would be late to market as there would be no business case to create software sooner.

The bodies were assured by HMRC at the end of 2009 that software business and iXBRL products would be up and running by autumn 2010. The institutes “kept quiet” to allow this to proceed.

By the end of 2010 it became apparent IT businesses had failed to stick to the timeline and “serious discussions” took place between the institutes, HMRC and the largest software providers.

“To some outsiders it would appear that we have just woken up. But we have been working on this for quite a few years,” said Riches.

iXBRL software problems have only come to light recently, so there was no opportunity for the tax bodies to pre-empt conversations with HMRC.

“What could we have done earlier? We couldn’t anticipate who would or wouldn’t have their software ready,” said Anita Monteith, tax manager at ICAEW.

Some members have recently complained to their institute that iXBRL-compliant software they have begun using is problematic. Some have found they can’t install the new technology as their server is too old, or that there is more manual data inputting required than they were led to believe.

However, the institutes have been in negotiations with HMRC to assure there will be a “soft landing”, due to the various teething problems. It published guidance, this week, on how it plans to deal with difficulties users may face.

The institutes are also working on a set of questions and answers on iXBRL that HMRC is due to publish later this month.