How XBRL submission to ESMA is different from the one to HMRC?
If you are a listed company in the UK, you are most likely, aware of the EU Transparency Directive that requires companies with equity or debt listed on an EU-regulated market, to publish their consolidated annual financial reports (AFRs) each year.
In 2019, you were probably preparing to get your reports ready to be filed in the European Single Electronic Format (ESEF). As mandated by The European Securities and Markets Authority (ESMA), these reports will have to be in XHTML format and tagged with machine-readable data, better known as iXBRL.
You were thinking, ‘Great! I already prepare iXBRL files to submit to HMRC, so I’m covered.’ Unfortunately, you are mistaken.
The Financial Conduct Authority (FCA) says that the new requirement will apply to financial years beginning on or after 1st January 2021. Hence we want to help you be prepared by helping you understand the finer details.
Key Differences between iXBRL for HMRC Submission and iXBRL for ESMA Submission
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ESEF – The New Taxonomy
iXBRL for HMRC |
iXBRL for ESMA |
| The elements that you use to tag while preparing for HMRC submission, may or may not be a part of the new ESMA requirement. | If you are a company with transferable securities that trade on UK-regulated markets, your reports will need to reflect those distinct elements of financial reports that the ESMA wants information on. |
| However, the taxonomy used is completely separate and will need a new set of tags to be developed, as each submission is for a distinct disclosure. | For instance, income statements, balance sheets, etc., will have new taxonomy tags that have been determined by the ESMA. |
| HMRC expects only one file in iXBRL format without any supporting files. Creation of custom elements are not allowed. | ESEF expects iXBRL output with the supporting files towards presentation, calculation, definition, label, and schema file. Creation of custom elements are allowed and have to be anchored to available or other custom elements. |
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Software
| iXBRL for HMRC | iXBRL for ESMA |
| Existing software that facilitates submission in XBRL or iXBRL to HRMC should suffice. | A new taxonomy could present the need for software that can integrate the new rules and tag your companies’ key financial data appropriately. Tagging consolidated financial statements will be different from existing arrangements used for HMRC. This is a requirement to ensure that your submission to the regulator is accurate, validated, and error-free with minimal human intervention. It is best to check with your HMRC software solution provider if there are upgrades or alternatives available to accommodate your requirement for ESEF filing for ESMA. |
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Deadlines
| iXBRL for HMRC | iXBRL for ESMA |
| For HMRC filing, you have a long window of 9 months after the end of the accounting year to submit your reports. | For your ESMA filing, the timeframe is much tighter. You only have four months after financial year-end for this requirement, making it more integral for you to have an efficient system and process to ensure that you are meeting the deadlines. |
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Public Disclosure.
| iXBRL for HMRC | iXBRL for ESMA |
| Submission directly goes to HMRC and is only for viewing by the regulator, privately. | With the new ESEF reports for ESMA being more open to public scrutiny than the HMRC submission, the regulators and other stakeholders will see this as an opportunity to benchmark your firm against other peers, facilitating a world of new possibilities. |
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Presentation layout
| iXBRL for HMRC | iXBRL for ESMA |
| Filers can submit the report in standard presentation layout. | Since this is a public document, filers would want to use the annual report for marketing and hence, present reports in layouts rich in design, with images and graphs. The tagging solution chosen should be capable of handling tagging on top of this rich design layout. |
Should we expect a convergence in taxonomies in the future?
Although the FCA is also working on a dedicated taxonomy for the UK that will help integrate the iXBRL reports for both HMRC and ESEF, it is still a work in progress and is only expected to come into effect in late 2021 or 2022.
Harness the expertise of DataTracks!
Irrespective of the kind of report you need to submit, choosing the right platform to handle your key financial data enables your organization to move quickly while managing and mitigating risks. DataTracks’ Rainbow is your solution to ensuring data accuracy and regulatory reporting efficiency in a single cloud platform. Rainbow helps facilitate easy conversion of financial data into iXBRL and makes reports ready for submission to the ESMA.
DataTracks is the ideal partner for companies in the UK, which provides a solution calibrated to suit both ESMA’s ESEF and HMRC filings by leveraging the use of common elements and making suitable adjustments wherever necessary.
DataTracks, with a presence in 26 countries, has experts with over 16+ years of experience in the field of compliance reporting. Having generated close to 195,000 reports, we have ensured the quality and assurance of accurate reporting support at competitive prices. Our data confidentiality and efficient working have earned us 19,400 happy clients.
With our flagship solution, Rainbow, and our experienced service in preparing the compliance report for you, we let you invest your valuable time on the numbers, not on the process.
Get in touch with us at +44 (20) 3608 1300 or enquiry@datatracks.eu to know more.