HMRC has published a note summarising the outcome of the first two years since online filing became mandatory for virtually all Company Tax Returns, and gives advice on some key issues for the future.

The note mentions that, in keeping with the announcement last summer, there will be no major change to the XBRL tagging requirement this year. However, later this year HMRC will introduce a new detailed profit and loss account taxonomy. A ‘taxonomy’ is the dictionary which tells you which tag to use for a particular tax or accounting concept.

There will then be a single tagging requirement, whether the detailed profit and loss account appears in the accounts or the tax computations. It is HMRC's view that this will make it easier for users to provide the right information, with a consistent and comprehensive set of key data. Improvements are also being made to the structure of the HMRC computation taxonomy with the intention of making it more straightforward to work with.

It is also mentioned that HMRC's approach during the transitional period sought to advise and support companies to comply with requirements, not to reject returns or penalise for getting things wrong. It is not intended that there will be a sudden change to this. In particular, the principle of ‘reasonable excuse’ continues. That is, the law provides that where a person has a reasonable excuse for failing to do what they are required to do they will not be penalised.

However, HMRC is now seeing very few cases where there is still a genuine reasonable excuse for not filing online, or for failing to meet the XBRL tagging requirement. They have accepted a few thousand paper returns for periods ending after 31 March 2011. Such cases they say will be “exceptional” in the future.

In addition, HMRC is paying increasing attention to returns which appear not to have the expected number of tags or where tagging is clearly inaccurate. XBRL data makes accounts and computations available for computerised analysis tools and the application of risk rules.

As a result, this enables better-targeted compliance checks and hence partial or inaccurate tagging makes it more likely that a return will be selected for detailed risk analysis leading to a compliance check.

However, there will be no short-term change to tagging requirements. Two recent developments in relation to accounting standards and UK Generally Accepted Accounting Practice make it undesirable to introduce other changes to accounts preparation requirements for tax purposes at this time. Each of these will, in time, require the preparation of a new XBRL taxonomy to fully match the new standard.