What Accounts Does HMRC Require with My Tax Return?

# What Accounts Does HMRC Require with My Tax Return?

When you submit your Company Tax Return, you must include your company accounts and tax computations in a specific digital format. Understanding what HMRC requires—and how it needs to be formatted—will help you avoid delays and potential penalties.

Your Legal Obligation to Submit Accounts

Your company's legal obligation to deliver a Company Tax Return begins when HMRC serves you with a 'Notice to deliver a Company Tax Return'. Once you receive this notice, you must file your return online, including your accounts and tax computations.

What Format HMRC Requires

HMRC requires you to file your accounts and computations in Inline eXtensible Business Reporting Language (iXBRL) format. This is a digital format that allows HMRC to read and process your financial information automatically.

What is iXBRL?

iXBRL is the standard form for presenting business reports in a way that both humans and computers can read. The 'inline' part means the document looks like a normal PDF or web page to you, but contains hidden tags that HMRC's systems can extract and process automatically.

Think of it like this: your accounts appear as normal financial statements when you look at them, but behind the scenes they contain digital labels (tags) that tell HMRC's computers exactly what each figure represents—whether it's turnover, expenses, or profit, for example.

Do You Need to Understand XBRL Tagging?

Most company directors won't need any knowledge of XBRL or how to tag documents. If you use commercial accounting software to prepare your accounts and file your Company Tax Return, the software will insert the XBRL tags automatically behind the scenes. You won't need to do anything additional.

However, if you're preparing your accounts yourself, working with a bookkeeper who isn't familiar with the requirements, or simply want to understand what's happening when you file, it's worth knowing the basics of what needs to be tagged.

What Gets Tagged?

XBRL tags identify specific pieces of financial information in your accounts and computations. The tags tell HMRC's systems what each number represents in your financial statements—from your balance sheet figures to your profit and loss items, and the calculations in your Corporation Tax computation.

Your commercial software should handle all of this automatically, applying the correct tags to each line in your accounts according to HMRC's approved taxonomies. A taxonomy is essentially a dictionary that defines all the possible tags and what they mean.

Using Commercial Software

The easiest way to meet HMRC's requirements is to use commercial accounting software that produces iXBRL-formatted accounts automatically. Most modern accounting packages include this functionality as standard.

When you prepare your accounts using compliant software, it will:

• Generate your financial statements in the correct format
• Insert all necessary XBRL tags automatically
• Ensure the tags match HMRC's acceptable taxonomies
• Create a file ready to submit with your Company Tax Return online

You don't need to see or understand the tags—the software handles everything in the background while showing you normal-looking accounts on your screen.

If You Need to Know More About Tagging

If you're handling your own tax affairs or working without commercial software, you'll need to understand XBRL tagging in more detail. HMRC provides specific guidance on when to tag, what to tag, and how to tag your accounts and computations correctly.

The key is ensuring your tagged accounts match one of HMRC's acceptable taxonomies, which define the standard tags for different types of financial information. Getting this wrong could mean HMRC's systems cannot process your return properly, leading to queries or the need to resubmit.

Filing Your Company Tax Return

Your Company Tax Return isn't complete without the accounts and computations in the correct iXBRL format. You cannot file your return using paper accounts or untagged PDF documents—HMRC's online filing system requires the iXBRL format for the submission to be accepted.

Make sure you:

• Use software that produces iXBRL-formatted accounts, or ensure your accountant does
• Check your accounts are properly tagged before submission
• Keep copies of both the human-readable and iXBRL versions of your accounts
• File everything together with your Company Tax Return by your filing deadline

Getting Help

If you use an accountant to prepare your Company Tax Return, they will handle all the iXBRL formatting and tagging requirements for you. This is one of the key reasons many company directors choose to work with a professional—the technical requirements can be complex if you're handling them yourself.

If you're preparing your own return, invest in reputable accounting software that's compatible with HMRC's filing requirements. This investment will save you considerable time and reduce the risk of errors that could delay your submission.

Sources

• Company Tax returns: accounts HM Revenue and Customs require
• XBRL guide for businesses
• XBRL tagging: when, what and how to tag

This article provides general guidance based on current HMRC rules. For advice specific to your situation, speak to your accountant.