HMRC to close online corporate tax filing service – What it means for your business
On 6th March 2025, HMRC announced a significant change that will impact thousands of UK businesses. The government will close free online services for filing company accounts and corporation tax returns from 31st March 2026. This decision means that businesses will need to invest in commercial software to remain compliant.
What’s changing?
For many small businesses, HMRC’s free online corporate filing service has provided a streamlined and cost-effective way to submit annual CT600 returns, corporate tax computations, and financial accounts to both HMRC and Companies House. The system automatically converted figures into the required iXBRL format, reducing administrative burden and potential errors.
However, this service was only available to smaller, straightforward companies meeting strict criteria:
- Turnover under £632,000
- Rental income not exceeding £5,200
- Not part of a group
- Registered in the UK
Beyond these limits, companies faced restrictions if they needed to report:
- Chargeable gains or losses
- Investment allowance
- Freeport allowances
- Special rate allowances
- Foreign currency transactions
- Foreign trade income
- Leased cars
- Research and development costs
- Prior-year adjustments
- Share-based payments
What does losing the online corporate tax filing service mean for Companies?
From 1 April 2026, all companies, regardless of size, will have to use commercial software to file corporation tax returns and submit accounts to HMRC. This change also aligns with Companies House’s push for fully digital accounts submissions, although a precise mandatory date for this has not yet been confirmed.
For companies with accounting periods ending after 31 March 2025, this means an additional cost in acquiring, learning, and managing new tax filing software. HMRC has provided a list of potential suppliers, but businesses will need to ensure their chosen software supports:
- CT600 form filing
- Corporation tax computation submission
- iXBRL tagging of financial accounts
Why is HMRC closing the free service?
The closure of the free filing service is largely driven by the Economic Crime and Corporate Transparency Act 2023 (ECCTA). The Act introduces stricter financial reporting requirements, including mandatory profit and loss accounts for small and micro-entity companies. In the near future, all accounts filed with Companies House will need to be iXBRL-tagged, making it easier for HMRC to cross-check tax submissions against financial statements.
While the intention is to increase transparency and combat fraud, many small businesses feel this is an unnecessary burden, as it disproportionately affects compliant micro-companies while attempting to target fraudulent filings.
How should businesses prepare for HMRC closing the online corporate tax filing service?
Businesses should take proactive steps to ensure a smooth transition before the 31st March 2026 deadline:
- Identify suitable software – Research tax filing software that meets HMRC’s and Companies House’s future requirements.
- Budget for additional costs – Expect ongoing expenses for software subscriptions and potential accounting support.
- Review financial reporting processes – Ensure accounts and tax filings align correctly to avoid compliance issues.
- Seek professional guidance – Working with a qualified accountant will help mitigate these changes efficiently and avoid costly mistakes.
Our view at BAS Associates
While increased digitalisation may help streamline processes in the long run, this shift places an extra financial and administrative burden on small businesses that were previously able to file for free. The transition to paid software services will likely add unnecessary complexity and costs to compliant businesses, with limited benefit beyond making it easier for HMRC to compare tax filings against financial accounts.
At BAS Associates Ltd, we are committed to helping businesses stay ahead of these changes. If you need guidance on choosing the right software or ensuring your accounts remain compliant, get in touch with our team today.
Contact us today for tailored tax and accounting support.
