Are you a first time tax filer?
As a new business owner and an employer, running a burgeoning business definitely does mean a lot not only to you but also to the UK government and the Tax Regulator. If HMRC has issued a ‘Notice to Deliver a Company Tax Return’ and if you already have received one, it’s time for you to convert your Financial Statements to iXBRL format and file your tax returns with HMRC.
To help make your financial information readable to both computers and humans, Inline eXtensible Business Reporting Language (iXBRL) was introduced as a standard format for all companies’ financial statements that is tagged in XBRL.
Account sets done using iXBRL is accepted by both HMRC and Companies House in the UK. Since 2010, when a joint filing service was introduced, most companies file their company tax returns online in iXBRL, including financial accounts and computations.
For a fully compliant tax return filing, financial statements and tax computations have to be in accurate iXBRL format. Although multiple tagging software are available in the market, are they robust and resilient? Can they be trusted with all your key business data and information?
The presence of human intervention in converting your financial information to usable iXBRL formats can produce correctly tagged reports that compute tax returns efficiently.
To further understand this, here are a few impending threats to using automated software in computing your compliance:
Automated tools have the potential for error, which could result in violations when computing statistical data for regulatory compliance.
These automated systems may not be able to read and process complicated information and governance under compliance rules.
Software also poses the hassle of having to store data you wouldn’t normally store and/or write down rules/algorithms for creating passwords. A report of IDs with unchanged, default passwords is a hacker’s dream come true.
As with anything automated or computer-based, there exists the threat of information loss and leakages; when set against key financial and business data, this is a point that needs great consideration.
On the flip side, manually managing the process of tagging can reap more rewards than you may think.
Managed tagging and formatting is necessary for unique business compliance requirements that a software cannot process.
Precise records, tagging and accounts management processes by manual conversion, help in keeping up with compliance regulations.
Human strategizing is also a requirement when it comes down to compliance and cost-effective planning as well as in the development of a thorough implementation strategy.
Human intervention and managed tagging is required to ensure that automated tools are working properly and that processes are doing what they should to keep the company compliant with regulations.
Selecting the appropriate tag and adding the correct taxonomies is also a task that would prove to be more accurate with human intervention.
As mandates and IT threats evolve, regulatory compliance processes can be a huge burden on company resources. To streamline data management and curb costs as they strive for compliance, businesses turn to automated processes. However, this might not the right move as human managed tagging and manual conversion of accounts into iXBRL formats have proved to be more accurate. Businesses that have turned to compliance reporting companies that manually convert their books to iXBRL-ready data have not only avoided repeat filings and rejections but also forged ahead in preparation for more changes and advancements likely to come in the near future in the United Kingdom’s financial landscape.