Last week CoreFiling took advantage of an invitation to attend the SME Innovation Expo 2013 in London, organised by HMRC in conjunction with Capgemini. This high profile event gave an opportunity for small and medium IT suppliers to meet with a wide range of people from HMRC and other government departments.
CoreFiling was proud to be chosen to represent the SME community as one of only two companies profiled as ‘exemplars’ of effective working together with government. During the morning plenary session we shared the platform with Skyscape for informal Q & A giving insight into how to work successfully with a government department, the impact it can have on the business and some of the challenges that SMEs face. The role CoreFiling played in the invention and pioneering of iXBRL was also recognised during the presentations, which highlighted HMRC’s Company Tax filing project as the world’s largest, highly successful XBRL implementation.
The Keynote Speaker was Stephen Kelly, Chief Operating Officer at the Cabinet Office, who emphasised that under the Digital by Default agenda, there are excellent opportunities for SMEs to help drive efficiencies and offer cost-effective services.
Mark Hall, HMRC CIO, spoke about how HMRC is being transformed into a digital business, needing a different approach to delivering IT services. Increasingly, this means using a new SME ecosystem that can meet the growing imperative for agility as well as a range of new products and services. The key message was that: “HMRC is open for business with SMEs.”
Bill Cook from Capgemini gave a talk about ‘Supporting the SME agenda within government’, which again emphasised the role that companies such as CoreFiling can now play within government IT and how this aligns with Capgemini’s role as a Solutions and Systems Integrator within the new HMRC structure.
During the afternoon, twelve SME organisations exhibited their products and services to delegates from government departments such as HMRC, Cabinet Office, DWP and Ministry of Justice. CoreFiling and the other exemplar company, Skyscape, were on hand to discuss with other SMEs the keys to engaging successfully with government, and to market our own credentials to the visiting government departments.
This was an excellent, very well attended event. It was heartening to see the government’s increasing commitment to the SME community.
Much has been written about the end of HMRC’s ‘soft landing’, often promoting the common misconception that it just means the continuation of iXBRL tagging of accounts according to the Minimum Tagging List (MTL), rather than against the full taxonomy.
Whilst it is true that full tagging is not being mandated when the ‘soft landing’ expires at the end of March 2013, as was previously conjectured, there’s much more behind it.
Incorrect tagging is no longer an option
To quote HMRC: “… incorrect or missing tags may trigger HMRC’s risk-assessment rules – for example skewing one of our risk ratios – and this means there may be greater potential for post-submission contact from HMRC. That risk would be greater the less information from the minimum tagging list is tagged.”
The above statement dates from Mach 2011 and it is interesting to note that even at this early stage HMRC highlight the consequences of faulty tagging. More recently (May 2012) HMRC issued a further statement declaring it would be: “… continuing to expand the effective exploitation of XBRL, by quality assurance of XBRL tagging in a selection of returns already received and by development of the effective use of XBRL tags in risk assessment and other compliance work.” This underlines the fact that HMRC intend to use the quality of XBRL tagging to apply greater scrutiny to a company’s accounts.
More tagging rather than less
It’s interesting to note that in the same statement HMRC also pinpoint the risks involved in minimal tagging. The inference is that correctly applying a larger number of tags will actively help companies to avoid unwarranted scrutiny. Completeness is the key.
How Seahorse® can help
With Seahorse you can take steps to ensure that your tagging does not put you under the spotlight. The learning engine assists you in choosing the right tags to maintain tagging accuracy. It presents you with tag suggestions derived from its cumulative knowledge of every tag chosen by all the professionals who have used it to tag individual concepts. It’s been proven that these are not random suggestions, as the product has gained excellent results compared with others, and has reached up to a 99.9% pass rate at the HMRC Gateway.
Using Seahorse, you have the choice whether to apply full tagging or whether to use the Minimum Tagging List.
Whichever you choose, you can be sure that accuracy and transparency are assured.
When iXBRL tagging was first required for Corporation Tax filing and the ‘soft landing’ introduced to allow companies and accountancy firms to understand the new process, HMRC indicated that during the first two years they would exercise some leniency by not investigating companies solely on the basis of poor quality tagging.
However, it can be inferred from this statement that when the ‘soft landing’ does finally expire at the end of March 2013 there will be a tightening of the reporting regime with greater scrutiny and analysis of the tagging.
The need for accuracy and transparency
So, although tagging according to the Minimum Tagging List continues, contrary to what some had predicted, the main result of the expiry of the ‘soft landing’ transitional period will be the need to refocus on the accuracy of the tagging to avoid unnecessary HMRC investigations.
HMRC will expect companies to be transparent in their tax assessment; low quality or limited tagging could be taken as showing a lack of transparency. After March 2013 it can be assumed that HMRC’s risk assessment procedures will be actively looking for anomalies that point towards potential issues.
What are the risks involved in incorrect tagging?
We expect HMRC to use exception-based reporting to identify companies that have ratios well outside the norms for their peer group. If a company is applying incorrect tags to its financials, it is likely to come under the HMRC spotlight in the future.
Minimise the risks with Seahorse®
Using Seahorse companies can mitigate these risks and choose to tag according to the MTL or the full taxonomy. Seahorse makes it easy and the learning engine simplifies the task of choosing the right tag. Speed of tagging and accuracy are the watchwords. We’ve recently seen figures from HMRC reporting that Seahorse reached a 99.9% pass rate at the Gateway, illustrating the accuracy of Seahorse tagging.
With Seahorse you and your clients are in very safe hands.
We again return to the subject of year two tagging. We’ve talked in the past about how Seahorse can re-apply the tagging decisions already selected and confirmed in previous years’ tables and text. The issue today is speed of tagging – making the process as fast and painless as possible.
Seahorse has extended the ‘roll-forward’ process still further to make tagging even faster.
Both comments and footnotes can now be carried forward and reapplied in a similar way, simplifying the task further. Comments are transferred without the need for any user input, and footnotes can be confirmed in the same way as other tags.
Accelerating the process still further, there’s now an automatic confirmation option. So, where there are exact matches between table rows and columns in both previous and current documents, Seahorse can reapply the tags automatically without the need for manual intervention.
Just in case you were wondering, discretionary use of this facility is available, so you still retain full control over whether or not to deploy automatic confirmation of identical data. However, we think that many users are likely to opt for this extra time saving measure.
How long will it take to tag your year two accounts?
Perhaps you successfully circumvented the original HMRC iXBRL filing mandate by submitting last year’s Corporation Tax returns early to avoid the April deadline. If so, converting your accounts documents to iXBRL must now be on the agenda. What are the options? Well, if you’ve a number of accounts that you are already producing in Word or Excel, why change your process? Take a look at the advantages of Seahorse.
First of all, there’s help in choosing the appropriate iXBRL tags. Seahorse automatically tags the tables in your Word or Excel document and proposes the most appropriate tag to use. Its intelligent tagging engine harnesses the accumulated learning from all the filings put through the Seahorse system, so its suggestions continue to become more and more refined over time. There’s no need to trawl through the underlying taxonomy to find the tag you need.
If you have a number of accounts to tag within the same group company you can re-use your initial tagging decisions to swiftly create iXBRL documents for additional sets of accounts.
And if you have a formal review and sign-off process for your accounts, Seahorse lets you easily create a spreadsheet that automatically captures all the tagging decisions made and allows comments to be inserted, for example to explain why particular concepts have not been tagged.
Finally, Seahorse is provided over the internet, so you can use it straight from your browser, avoiding the expense of new infrastructure or purchasing a full-blown accounts preparation package and, because the whole process remains under your control, you don’t have to risk sending your data to third parties.
Seahorse remains one of the very few solutions to have experienced no problems passing the HMRC gateway first time. Why? Because not only does it incorporate validation against the Joint Filing Common Validation Checks imposed by HMRC and Companies House, but the underlying XBRL and iXBRL is fully verified during the Seahorse conversion process.
Seahorse takes away the pain of iXBRL conversion of Word and Excel accounts.
What could be simpler?
With the starting month for year 2 iXBRL filing rapidly approaching, Seahorse can help you dramatically reduce the time taken to tag this years’ accounts. If you’ve already been converting documents to iXBRL using Seahorse, you can now migrate the tags from your existing accounts to the next year’s accounts, without losing any of your original tagging decisions. Seahorse will still auto-tag any remaining items not contained in the earlier document. The migrated items should already be correct from the previous year’s filing, so very few changes should be required. As a result, the review process will be shorter and the whole year 2 tagging procedure will take significantly less time now that you don’t have to start again from scratch.
As an added bonus, you can also re-use your tagging decisions to speed up the tagging of accounts for several different companies within the same corporate group.
As promised in early September, the new version of Seahorse has just been released, providing full conversion of Microsoft Excel accounts to iXBRL format, ready for HMRC Corporation Tax filing.
There’s no need to change the way you currently work. Just take your Excel accounts document and let Seahorse apply the appropriate iXBRL tags. The process replicates the same automatic tagging approach that has been so successful in the conversion of Word accounts. It also features the same ‘round-tripping’ functionality that allows you to make changes to your accounts outside Seahorse and then re-import the Excel document back into Seahorse without losing any pre-existing tags.
A fully validated iXBRL document emerges, ready for submission to HMRC as part of your CT filing.
So, don’t change your existing process. Let Seahorse simplify and streamline your tagging of Excel documents.
License Seahorse through our partners.
It’s official – Seahorse can now help you tag your Excel based accounts. The beta version of our fast, accurate Seahorse iXBRL conversion tool is now available for demonstration.
The final production version will be available later in September. The beta version shows how accounts documents created in Excel can be uploaded to Seahorse and tags applied in a similar manner to the auto-tagging of Word accounts. If you’re an existing user of the Word version of Seahorse you’ll find the workflow very familiar, including the same intelligent tag suggestion process designed to speed you through tag selection.
So, if you’re currently using Excel to create your accounts and have no wish to change your process in order to comply with HMRC’s mandate for the filing of Corporation Tax accounts in iXBRL, look no further. Seahorse provides the perfect solution for Excel users, so get in touch with one of our Seahorse partners today!
My previous blog post talked about review sheets in Seahorse™. However, even if you’re not using Seahorse, you can still check the quality of your iXBRL documents prior to filing. Why is this important? Because even though HMRC has indicated they will not penalise filers who make best endeavours to comply with the mandate, their guidelines also state that incorrect or missing tags may in certain circumstances prompt further risk assessment and follow-up.
Enter Magnify™, our desktop document review tool. Magnify uses a checklist approach to guide you step by step through an assessment of your iXBRL document. Wherever possible it performs automated tests, verifying calculations and highlighting any discrepancies and errors. No matter whether you produce your iXBRL in-house, use the output from an accounts production package or outsource the whole process to a third party, Magnify gives you that extra peace of mind knowing that you’re submitting quality documents that will pass the HMRC gateway without issue.