Hi

If you’ve ever felt like services you rely on are getting worse while costing you more, you’re not alone. From social media platforms becoming ad-heavy and less useful to essential business tools disappearing behind paywalls, it’s a trend that now even extends to the UK tax system.

HMRC has announced that its free online filing service for corporation tax returns and company accounts will shut down on 31 March 2026—forcing small businesses to pay for commercial software just to stay compliant.

What’s Changing?

Currently, many small companies can use HMRC’s online system to submit their CT600 tax return and company accounts in one simple process. The system even converts figures into the required iXBRL format automatically. But soon, that option will disappear.

From April 2026, all businesses—no matter how small—will have to buy third-party software to file both their corporation tax returns with HMRC and their company accounts with Companies House.

Who Will Be Affected?

If your business has a financial year ending after 31 March 2025, you’ll need to start using commercial software unless you file early. Even micro-businesses and sole directors of small companies will no longer be able to file for free.

Why Is HMRC Doing This?

The decision seems to be tied to the Economic Crime and Corporate Transparency Act 2023, which aims to improve the accuracy and comparability of company accounts. Eventually, all company accounts filed with Companies House will need to be tagged in iXBRL format, just like tax filings with HMRC. This makes it easier for HMRC to compare figures and detect fraud.

While improved transparency is a worthwhile goal, this change places an unnecessary burden on the smallest and most compliant businesses—forcing them to pay for software just to meet basic filing requirements.

What This Means for Small Businesses

• Increased Costs – You’ll need to budget for commercial tax software, even if your finances are simple.
• More Administrative Hassle – Finding the right software that supports CT600 filing, tax computations, and iXBRL tagging won’t be straightforward.
• Less Choice – The list of software providers approved by HMRC is limited, meaning fewer options and potentially higher prices.

If you currently use HMRC’s free filing service, it’s time to start planning for the switch. Look into commercial tax software options early, and factor in the additional costs for your business from April 2026 onwards. If you need my help just get in touch here.

As always, we’ll keep you updated on changes that impact small businesses—because we believe tax compliance shouldn’t be an expensive headache.

Let us know your thoughts—does this change affect your business? 

Noel Guilford