The Financial Reporting Council (FRC) released the UK Single Electronic Format (UK SEF) taxonomy in September 2020 as part of its 2021 suite of taxonomies. In its communication back then, the FRC said companies could use the UK SEF taxonomy for their filings with the Companies House and the HMRC.
In this short write-up, we discuss the similarities between the UK SEF taxonomy and the European Single Electronic Format (ESEF) taxonomy. We will also answer the question if UK companies can use the UK SEF taxonomy instead of the ESEF taxonomy for their reporting with the Financial Conduct Authority (FCA).
We’d further like to remind our readers that the UK opted for a revised timeline for implementing the ESEF mandate, to lessen the financial burden on companies due to the coronavirus pandemic.
UK SEF: A brief intro
In a PwC blog, iXBRL expert Jon Rowden writes that UK SEF is a taxonomy that builds upon or extends to the ESEF taxonomy. UK SEF adds the component of carbon emissions disclosures to the ESEF taxonomy through the Streamlined Energy and Carbon Reporting (SECR) requirement. It also makes room for a mention of the company’s registered number and period end date — a requirement for filing with the Companies House.
Simply put, UK SEF = ESEF + SECR + Company’s registered number and period end date.
It may also help to recall that the SECR taxonomy was released in early 2020, having been developed jointly by the Financial Reporting Council (FRC), Companies House, and the Department of Business, Energy, and Industrial Strategy (BEIS).
Can companies use UK SEF instead of ESEF?
The UK’s Department for Business, Energy, and Industrial Strategy (BEIS) has said that companies could use UK SEF to file their annual reports with the FCA.
However, companies might be hesitant to take on the additional burden of Streamlined Energy and Carbon Reporting (SECR) that comes with UK SEF. They may prefer using the ESEF taxonomy for their FCA reporting.
Expert view on the SECR requirement
Jon Rowden, who we’ve mentioned above, writes that since stakeholders will have access to information in a digital format under ESEF, it seems reasonable for companies to extend that information to cover SECR disclosures. That would also allow them to file the fullest version of their annual report with the Companies House.
However, since ESEF is an annual commitment and filing for the first time in that format may be a challenge, “the UK SEF step-up could be rolled into the additional tagging necessary for second year compliance with ESEF”.
As another option, UK SEF can be deferred until it becomes mandatory, says Jon. He adds, however, that there is no certainty that UK SEF will be made mandatory.
Jon says he hopes that some companies decide that compliance with the additional SECR requirement is a step worth taking. “…the SECR data is of considerable interest and the more data that can be filed at Companies House, the better.”