Source: XBRL UK Limited
The launch of a service for company tax filings in eXtensible Business Reporting Language (XBRL) by HM Revenue and Customs is an important step towards general regulatory filing of financial data in this new electronic language, the UK arm of the international XBRL consortium said today.
HMRC is also releasing a Technical Pack for software developers and will provide assistance as they enhance their products to use XBRL.
HMRC's announcement that its Corporation Tax Online service can now accept tax computations in XBRL format follows the start of filing a few weeks ago of accounts in XBRL to Companies House. The Companies House system currently covers audit exempt accounts, but both it and HMRC are looking to expand the scope of accounts filed in XBRL in due course.
"The announcement by HMRC shows that filing of financial reports in XBRL is moving from promise to reality in the UK," Chris Rodgers, chair of the XBRL UK Consultative Committee, said. "This will bring benefits of efficiency and cost savings in due course to investors, companies and regulators alike. We congratulate the Revenue on the hard work they have done to establish their XBRL service for Corporation Tax."
Jeff Smith, manager of the HMRC's XBRL project, said: "The introduction by HMRC of an XBRL service is a step towards the streamlining of financial reporting processes of UK companies. HMRC would like to have XBRL enabled systems used by companies and accountancy firms of all sizes and will continue to work with XBRL UK Ltd, the financial community and software vendors to further this aim."
Both HMRC and Companies House are advancing the use of XBRL in manageable, planned steps, allowing regulators, companies and financial software vendors to accustom themselves to the use of the language and its benefits.
HMRC's announcement of its new service is at http://www.hmrc.gov.uk/ebu/corporation-tax-online.htm. Its Technical Pack is available at http://www.hmrc.gov.uk/ebu/softw_index.htm.
XBRL enables computer-readable tags to be applied to individual items of financial data in business reports, transforming them from simple blocks of text into information which can be understood and processed automatically by computer software. It offers cost savings, greater efficiency and improved accuracy to all those involved in preparing, analysing or communicating business information. It is being developed and promoted by an international consortium of some 400 major companies, organisations and government agencies.
Regulators overseas are also making good progress with XBRL projects. The use of XBRL for regulatory bank reporting in the US has achieved major success, according to the Federal Financial Institutions Examination Council (FFIEC). The FFIEC said its XBRL-based solution, which went live in October and receives reports from some 8,300 banks, had achieved measurable benefits, with an increase from 66% to 95% in data cleanliness, 70% to 100% in accuracy, weeks to hours in timeliness and a 15% rise in the productivity of analysts.
The central banks of Japan and Spain have recently started live use of XBRL, while the central bank of Belgium said last month that some 290,000 companies would be using its new XBRL system from April 2007.
The US Securities and Exchange Commission (SEC) is also advancing its pilot project for filing of company data in XBRL. SEC Chairman Christopher Cox told an international XBRL conference that the evolution of interactive data and leadership shown by the XBRL community had led global financial markets to the threshold of truly breathtaking changes.