Companies unprepared for HMRC e-filing requirements

Deloite says new e-filing requirements will mark a significant change in practice for companies.

Some 93 per cent of companies have done nothing to prepare for e-filing requirements that will become mandatory in March 2011, according to a report from professional services firm Deloitte.

HMRC has asked for all UK Corporation Tax filings to be filed electronically by this time - in addition all tax returns, tax computations and statutory financial accounts must be tagged using Inline Extensible Business Reporting Language (iXBRL).

Deloitte says that the new requirements will mark a significant change in practice for many companies.

The analyst firm polled over 100 tax professionals from a range of leading UK businesses to find out how ready they were to meet these requirements.

Just four per cent of companies say they have already chosen a solution or service provider to meet the e-filing requirements set by HMRC; while 44 per cent have done no planning at all; and 49 per cent have only started to assess solutions.

Some 22 per cent of companies are considering outsourcing the e-filing of their accounts in the short term. By comparison, 75 per cent of firms in the US outsourced this process as soon as e-filing was made compulsory in America, allowing them to delay purchase decisions until the market had matured.

Only 21 per cent of respondents see the move to iXBRL as a driver to transform their accounts preparation process, while 71 per cent see it as an additional step in the compliance process.

Four out of five companies (80 per cent) report under UK GAAP (Generally Accepted Accounting Practice), while just 17 per cent report under IFRS (International Financial Reporting Standards).

However, over half – 54 per cent – have yet to decide how they will approach the possible elimination of UK GAAP accounting regulations alongside the implementation of iXBRL filing.

Andy Gwyther, tax partner at Deloitte, said: “The new filing regime will become mandatory from 31 March 2011 for return periods ending after 31 March 2010 and businesses need to start planning their approach now.”