HMRC currently provides free filing software for small companies with simple tax affairs to submit their own annual company tax return and accounts to HMRC and Companies House. We have been recently contacted about a forthcoming change to this software.

Companies House and HMRC are developing a new company tax return and company accounts filing service called Company Accounts and Tax Online (CATO).

This new service is intended to make it quicker and easier for companies to file their own annual accounts to Companies House and company tax returns to HMRC – at the same time or separately. Like the current HMRC free filing software, the new service is designed for unrepresented taxpayers with straightforward affairs.

CATO is an online service which companies will be able to access using their own filing credentials, unlike the existing HMRC free filing software, which uses a form downloaded from the internet.

While most agents use commercial software to file company tax returns and annual accounts on behalf of their clients, HMRC are aware that a number of agents use the current HMRC free filing software as there is no restriction on who can download the form. With the introduction of CATO agents will not be able to use this service on behalf of their clients.

HMRC are aware that some agents will be concerned about the withdrawal of the free HMRC software and the need in future to use commercial software to file company accounts and company tax returns on behalf of clients.

The current HMRC free software will continue to be available for accounting periods ending on or before 31 December 2015, and will remain available until 31 December 2016 as a return for that accounting period will not normally be due until 31 December 2016. This is intended to allow at least a year for those agents who use the HMRC product to make alternative arrangements.

More information on commercial software suppliers can be found on GOV.UK.