Charities – online corporation tax filing
HMRC have introduced transitional arrangements to help small charities prepare for the introduction of online corporation tax filing. This becomes compulsory for company tax returns delivered after 31 March 2011 for accounting periods ending after 31 March 2010.
Where a charity is liable to corporation tax the new rules require the accounts and computations to be filed in iXBRL format. However, HMRC accept that the accounting principles by which smaller charities prepare accounts mean that the accounts template provided by HMRC may not be suitable.
HMRC will therefore continue to accept accounts from smaller charities in PDF format until free software that is suitable for charities to file their accounts online is introduced. The charities computations must be filed in iXBRL format but the free HMRC software should be suitable to prepare the computations.
A ‘smaller charity’ for the purposes of this arrangement is one where the combined income does not exceed £6.5 million for the accounting period.