Your Guide to HMRC-Approved Taxonomies

Taxonomies are an important part of financial reporting. By acting as a blueprint for organising and sharing information electronically, they help ensure consistency and accuracy. HM Revenue and Customs (HMRC) of the UK has specific taxonomies for electronic report submissions. This blog discusses these taxonomies and explains why they are important.

What are Taxonomies?

Taxonomies are the dictionaries of financial reporting. They include terms and elements that help classify and define data. By using these taxonomies, businesses can tag their financial information consistently and make automatic analysis easier. This uniformity helps regulators, investors, and other stakeholders to compare and understand financial reports easily. Taxonomies are regularly updated to reflect changes in the accounting standards.

HMRC and UK Taxonomies

HMRC, the UK’s tax authority, requires businesses to use certain taxonomies when submitting financial statements electronically. These taxonomies are part of the Inline eXtensible Business Reporting Language (iXBRL) framework.

Since 1 April 2011, companies in the UK have been mandated to submit their company tax returns using the iXBRL format. The list of XBRL taxonomy accepted by HMRC is as follows:

Corporation Tax Computational Taxonomies

These taxonomies help businesses tag and report their financial data specifically for corporation tax calculations.

Financial Reporting Council (FRC) Accounts Taxonomies

The FRC accounts taxonomies assist businesses in preparing and submitting financial statements.

Detailed Profit and Loss Section Taxonomies

These taxonomies focus on the details of profit and loss statements. They provide a clear way to tag items like revenue, expenses, and net profit.

Non-UK Taxonomies Accepted by HMRC

Currently, HMRC only accepts accounts tagged with a non-UK taxonomy if it is US GAAP. However, they may add more taxonomies in the future. If there is no matching taxonomy for the accounting standard used, or if HMRC’s online service does not accept the taxonomy, companies must submit the accounts as a PDF file.

The taxonomy versions accepted for all sectors include the following:

1. US GAAP 2015
2. US GAAP 2016
3. US GAAP 2017
4. US GAAP 2018
5. US GAAP 2021
6. US GAAP 2022
7. US GAAP 2023

Bottom Line

iXBRL makes financial reporting easier and more accurate by combining human-readable and machine-readable data into one document. It streamlines the submission process, improves data accuracy, and boosts transparency.

Looking for a trusted partner to navigate this process seamlessly? DataTracks can be your right choice! With expertise in  iXBRL tagging, we ensure your financial reports comply with HMRC standards. Our team has 19+ years of experience in preparing over 400,000 error-free reports for more than 28,000 clients. So what are you waiting for? Contact us enquiry@datatracks.co.uk or +44 (20) 3608 8035.