Corporation tax alert for businesses

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HM Revenue & Customs (HMRC) is writing to half a million companies and tax agents this month, to alert them to important changes to Corporation Tax (CT) filing.

The mail-shot contains a new HMRC leaflet on the changes, which will require all company tax returns delivered after 31 March 2011 to be filed online, for accounting periods ending after 31 March 2010.

The leaflet explains how, after 31 March 2011, CT returns must be filed online in a specified data format (known as Inline XBRL or iXBRL). Companies will be able to file online either through commercially available software or by using HMRC’s own CT filing software, which is aimed at companies with less complex tax affairs.

As the leaflet explains, there is no need for companies to re-engineer their accounting processes to comply with the requirement to file online using iXBRL, as either HMRC’s CT filing software or their commercial software will do this for them.

Mark Holden, Director of HMRC’s Carter Programme, said: “While March 2011 might seem a long way away, agents and businesses need to be thinking about these changes now, as they will affect accounting periods ending after 31 March next year.

“HMRC is hoping to release its CT filing software towards the end of this year. We’re also working closely with software developers, and a number of commercial products will be available to support the iXBRL standard from November 2009, with more to follow. This will mean the majority of companies who wish to familiarise themselves with filing online before it becomes compulsory will have the opportunity to do so.”

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