First there was the old chestnut of XBRL being a solution looking for a problem. As if financial information transparency wasn’t a big enough problem for the world right now. Then despite a nod to XBRL’s own Tacoma Archimedes – Charlie Hoffman – it is regulators who are claimed to be the ‘innovators’ of XBRL.

(This is in contrast to that other well-known son of Tacoma, Jimi Hendrix, who was a problem in search of a solution. Unfortunately he never found it. But many of us got a great deal of benefit from his search…)

Certainly XBRL wouldn’t have got as far as it has without the take-up by regulators around the world but they are hardly the innovators. Rather, to their credit, what regulators around the world realized was that XBRL helps them to lower their costs, improve their business processes and do their core tasks more effectively. Everything that taxpayers should expect from an effectively run public-sector organization.

XBRL is claimed to be a ‘chore’ for businesses. Yet large numbers of them are apparently unaware of it. This is particularly the case in the UK where the spectre of filing in iXBRL to HM Revenue and Customs (HMRC) has apparently gone ‘completely under the radar’ (is that sonar?) And perhaps there’s a good reason for that. Most businesses in the UK don’t actually care about filing in iXBRL.

This is because many businesses file to HMRC via their accountants. So it is their accountants who have to care. If a UK accountant isn’t aware of the new iXBRL filing requirement then he should be struck off – it’s his business to know and deal with it. And if a business itself opts to file online via the HMRC web service then the iXBRL file is generated for them automatically. Alternatively a business can choose neither of these two options and figure out how to generate iXBRL themselves. As if.

But surely this new iXBRL filing burden is going to cost hard-pressed UK businesses a lot of dosh? Well it shouldn’t. Because as David Forbes rightly points out in the FT article, it should be just a question of accountants (or more likely their clerks) ticking a box in their accounts production software that says ’send in XBRL’. Which is basically like that option ‘print as PDF’ in a word processor – another onerous task that I don’t recall anyone getting aerated about and predicting ‘rough’ years ahead for word processing.

Undoubtedly some wicked software vendors may try to charge extra for that little tick box. But for most it will probably just be a maintenance release covered under their annual support agreement. In the meantime however, it’s in the interests of both the accounts production software sector and the compliance consulting industry for this iXBRL stuff to be blown out of all proportion. Then they can run lots of seminars about how their application magically removes this new burden from the shoulders of users of their software/service. I’ll be going to one next week – just in case I’ve missed something.

Someday, someone is going to write a fascinating book about the myths and legends of XBRL but for now we should just sit back and enjoy as the narrative plays out before our very eyes.

From April 2011 under UK Government proposals, all companies, clubs, societies, associations and other unincorporated bodies who are required to make a Company Tax Return will have to:

- file their company tax returns online for all returns delivered after 31 March 2011 for accounting periods ending after 31 March 2010, using a specified XBRL data standard for accounts and computations and

- pay their Corporation Tax electronically.

Under these proposals HMRC will not accept:

- a company tax return and required attachments filed on paper when it should have been filed online

- any returns filed online with accounts and computations sent as Portable Document Format (PDF) attachments – all returns delivered after 31 March 2011 for accounting periods ending after 31 March 2010, must be filed using inline XBRL (iXBRL).

This means that all corporate tax filings and legal entity/group statutory accounts prepared under UK GAAP or IFRS will be filed to HMRC using a version of XBRL, significantly enlarging the taxonomy-based financial information ecosystem both in the UK and globally. Most of these filings will be managed from existing tax and final accounts preparation software (e.g. IRIS) adapted to generate XBRL compliant output or via the UK HMRC’s own online filing application which will generate the required iXBRL format automatically on submission.

But not everyone agrees this move to XBRL filing is a good thing:

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.

There could be some saving in compliance costs if one filing submission could cover the provision of tax and accounts to both HMRC and UK Companies House (two separate submissions are required today) but again not everyone is convinced this will happen anytime soon:

HMRC says they will still require, as now, full statutory accounts to be submitted as part of the Company Tax Return. The accounts the company submits to Companies House may still be full or abbreviated (if this is permitted under the Companies Act). The intention is that this will be possible as a single submission, with each department only able to access the data that it gets now. HMRC adds that there are no plans to change either the statutory filing deadlines for accounts to be submitted to Companies House or for Company Tax Returns to be filed with HMRC.

Whether one submission or two, in reality the financial ecosystem is not just about filing financial information in XBRL format. The financial ecosystem only grows and delivers value if those filings are easily available (e.g. via web services or RSS feeds) to any and all information consumers: Investors, analysts and the managers of the businesses making the filings. The SEC has grasped that nettle here in the USA but will HMRC follow suit in the UK? Or will it be the case that, as Her Majesty’s might say, “We do not do RSS.”