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About In House Tax

About In House Tax

This weblog is a news and views site for tax professionals within the UK and international in-house tax community.  You will find information about appointments and people moves in and around the in-house tax market, issues affecting the in-house tax professional, opinions on the state of the tax job market, updates on tax technology, and other general thoughts of the day.

Hope you find it useful.

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Location: St Albans, United Kingdom

This site has been developed by Simon Godley, who also runs the niche tax recruitment company Talentpool Selection . Simon spends a lot of his time placing tax specialists into FTSE companies, large in-bound groups and some professional services organisations. He also recruits and is well networked around the UK tax technology and VAT markets.

Tax News

Tax advisers brand HMRC's move to XBRL 'strange'

Monday, 20 July 2009


Tax experts have condemned the insistence from the taxman that corporate tax returns only be made in the future using the controversial computer language XBRL.

For accounting periods ending after 31 March 2010, corporate tax returns have to be submitted using XBRL, a language that tags financial data and allows comparability. The majority of corporate tax accounts are currently filed using Microsoft Word or Excel.

But tax advisers have described the decision to adopt XBRL as both ‘strange’ and placing an ‘unwanted overhead’ on small business.

Tony Spillett, tax partner at BDO Stoy Hayward, estimated the cost of implementing XBRL could be ‘tens of thousands of pounds’ per firm.

‘There’s potentially a lot of work to be done. There’s a lot of red tape and additional burden on business so that HMRC can make life easier for themselves. It’s a real unwanted overhead,’ he said.

He added the long-term shift away from paper filing was welcome, however ‘it’s the devil in the detail and the way the HMRC has used the opportunity to capture the data in XBRL form [that] is concerning’.

According to Kevin Salter, technology partner at Glover Stanbury & Co, the decision by HMRC to adopt XBRL as the required format is strange given so few firms currently use the system.

‘We have no choice. I don’t know what their rationale for going down that route is. Various representations have been made by accountancy bodies but they’ve chosen to go their own way,’ he said.

Salter said a contracted software house will implement the necessary change on behalf of the firm but expects support fees for the service to rise as a result of the new requirement.

Tax advisers believe the change to XBRL will mean HMRC has the capacity to mine data more effectively and could lead to an increase in the number of tax enquiries.

A spokeswoman for HMRC confirmed that if a return is not filed in the new format, it will be ‘disregarded’ and treated as not having been delivered.

She said HMRC has consulted with the profession over the change and is continuing to engage with the software industry.

SG comment: There are quite clearly some financial winners and losers within these proposed submission changes. The losers are the companies that have to adopt these changes, the costs of changing their systems, the penalties for getting it wrong, and knock-on defence work with HMRC from the numbers being 'tagged'. The winners will most likely be the Big 4 and practice from increased advisory and implementation fees, and the software houses from selling their accounting / tax systems to industry. It will be very interesting to see how this all gets rolled out over the next couple of years.

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posted by Simon Godley

KPMG signs tax software deal with Digita

Friday, 17 July 2009


Big Four firm KPMG has signed a six-figure deal with Digita to supply their personal tax software over the next five years.

KPMG are estimated to be paying more than £800,000 over five years to Digita, part of Thomson Reuters, to provide personal tax software as HMRC moves to mandatory online filing of returns.

Digita was narrowed down from a shortlist of three and secured the contract last year, with the firm previously supplied by CCH for personal tax technology.

KPMG declined to comment as they have a policy of not commenting on third party suppliers.

Digita also supplies software to Smith & Williamson as well as Baker Tilly. KPMG began implementing the new software in April last year with the firm waiting until it was embedded before making the announcement.

CCH recently signed a deal with Deloitte to supply their personal tax software, but have not responded as to when that deal was struck.

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posted by Simon Godley

Banking code of practice - impact on front office tax teams?

Friday, 3 July 2009

The U.K. government will step up its anti-tax avoidance fight Monday, with the treasury announcing plans to ask banks to sign a code of good practice, a person familiar with the matter said Friday.

The person said the treasury will publish a consultation document Monday which will urge banks to be more transparent about their tax affairs.

The voluntary code, first mentioned in the budget in April, will encourage them to enter discussions with the U.K.'s revenue and customs agency about how to comply with the spirit of tax laws.

Banks will have 12 weeks to respond to the consultation but the government is confident most major institutions will sign up, the person said. It's thought there have already been talks on the code between the treasury and leading financial institutions.

The code of practice will build on a similar mechanism that HMRC has used to minimize tax avoidance from leading U.K. businesses.

The idea is to open a grown-up dialogue where banks can privately share information about their tax arrangements with HMRC, consulting with officials on what is acceptable and what HMRC considers inappropriate. A senior bank official - preferably a board member - will be asked to sign up to the code, the person said.

But if banks don't sign up to the code - or sign but don't improve their behavior - HMRC could adopt a more intrusive approach. The treasury isn't ruling out moving beyond a voluntary code if that approach fails to change banks' behavior.

"A voluntary code based on an open and upfront dialogue is likely to yield a more genuine behavioral change," the person said.

The move comes as the U.K. battles an economic recession that has taken large bites out of government revenue and bloated the budget deficit to record peacetime levels. The deficit will be above 12% of gross domestic product this year, with public sector net borrowing set to reach £175 billion.

In a bid to plug the fiscal gap, the treasury has become more aggressive in a number of areas, leading international efforts to press tax havens to be more open and seeking to tighten the rules for so-called non-doms, people who reside in the U.K. but are not domiciled here.

There are no exact estimates of how much the government hopes to save through the new code.

The disclosure regime introduced in 2004 requires avoidance scheme users and promoters to disclose details to HMRC. Since the introduction of this regime, HMRC has acted on information received to protect over £11 billion.

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posted by Simon Godley

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