Draft UK Taxonomy Suite 2025: Key Changes and Updates

The Financial Reporting Council (FRC) has published the Draft UK Taxonomy Suite 2025, an annual release to accommodate UK GAAP and UK-IFRS changes. This suite is intended to enhance the quality, relevance, and reliability of financial reports. The changes are open for public consultation until 20 September 2024, and the FRC invites comments from the stakeholders. The following blog discusses a breakdown of major developments in the 2025 Taxonomy Suite and their impact on organisations and financial professionals.

Mandatory Annual Updates

The FRC revises the UK Taxonomy Suite annually to address changes in the environment of business reporting. This year, several mandatory updates are consistent with changes that have been adopted by the UK Endorsement Board (UKEB). Key changes include:

Supplier Finance Arrangements: Some new elements have been added as a result of the changes in IAS 7 (Statement of Cash Flows) and IFRS 7 (Financial Instruments: Disclosures).
Lack of Exchangeability: The suite now includes amendments to IAS 21 (The Effects of Changes in Foreign Exchange Rates) for use where the currencies are non-exchangeable.
Periodic Review and Amendments: The suite takes into account recent revisions of FRS 102 and other standard (FRED 82 and FRED 84). For example, adjustments in the principles of IFRS 15 (Revenue from Contracts with Customers) have been adopted for the entry point of FRS 102.

Housekeeping Updates

To improve the quality of financial data, the 2025 Taxonomy Suite introduces several housekeeping changes:

Employee Information and Ethnicity Breakdown: New hypercubes can be used to disaggregate employee data by sex, gender, and ethnicity.
Non-Negative Facts in Accounts: The data type for “Average number of employees during the period” has been changed to a non-negative decimal type. This update solves the error of reporting negative values to improve the data quality.
Balance Types: The definitions for some of the balance types have been clarified. For instance, the ‘Past service cost of defined benefit plan’ has been classified as ‘debit’, and ‘Increase (decrease) in net debt’ items fall under ‘credit’.
Financial Instruments Policies: Two new policy concepts, ‘Financial instruments classification policy’ and ‘Financial instruments recognition and measurement policy,’ have been added to facilitate disclosures of financial assets and liabilities recognised at fair value through profit or loss.
Net Reinsurance Contracts Held Analysis: To prevent duplication and ensure accurate reporting of this standard, duplicate domain members have been renamed.

Candidates for Digitisation

The 2025 update emphasises digitisation to streamline financial reporting and enhance accessibility:

Community Interest Company (CIC) Reports and Dormant Subsidiary Exempt Package (DSEP) Accounts: This update adds three new entry points for digital reporting: CIC 34, DSEP 00AA06, and DSEP Agreement. These enable more precise electronic submission, eliminating confusion and increasing the quality of the information.
Detailed Profit and Loss (DPL) Restructure: Some variations to the DPL schema were made to improve the integration of extension taxonomies and other entry points. This restructure will not impact the end-users but will improve the taxonomy’s flexibility and usability.
Exemption for Discontinued Operations: A new concept has been created to allow entities to exclude their reporting due to discontinued operations. This is also helpful in extensive tagging and viable reporting for organisations going through various transformations.
Capital Commitments: It allows issuers to tag multiple commitments individually to provide additional detail in financial reports.
Deferred Tax Adjustments: New concepts have been added for ‘Deferred tax adjustments from prior periods,’ giving better clarity for tax adjustments in previous years’ income statements.
Deferred Tax Assets: ‘Tax increase (decrease) from unrecognised deferred tax assets’ helps identify and tag the unrecognised deferred tax assets more specifically.

Extension Taxonomies

This year, the FRC also plans to update the Irish Extensions Taxonomy and Charities Taxonomy by extending the planned 2025 FRC Taxonomy Suite.

Conclusion

The Draft UK Taxonomy Suite 2025 is a step towards enhancing the efficiency of digital financial reporting in the UK. For companies required to file in iXBRL format, these changes offer a chance to update their reporting, enhance compliance with the new standards, and enhance the credibility and reliability of information disclosed.

Prepare accurate and compliant iXBRL reports for filing CT600 returns with HMRC. Contact our experts at +44 (0) 203 608 8035 or enquiry@datatracks.co.uk.