Tax agents to lose access to free HMRC corporate filing software
Susan Cattell, Head of Taxation (England and Wales) and Jeremy Clarke, Practice Support Specialist, provide an update on HMRC's plans to restrict tax agent access to its free corporate filing software.
Many ICAS members will know that agents can currently use the HMRC free filing software to file on behalf of their small company clients with simple tax affairs.
Small companies can also use this software themselves to submit their own tax returns and accounts to HMRC and Companies House.
HMRC has recently told ICAS and other professional bodies that it is developing a new filing service called Company Accounts and Tax Online (CATO).
The intention is that CATO will make it quicker and easier for companies to file their own annual accounts to Companies House and company tax returns to HMRC.
HMRC's view is that the current filing service is only intended for unrepresented companies with straightforward affairs but because of the nature of the system agents have been able to use it by downloading a form from the internet.
In contrast, CATO is an online service which companies will have to access using their own filing credentials. Agents will not therefore be able to use CATO to file on behalf of their 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.
This is to allow at least a year for agents who have been using the HMRC filing service to make alternative arrangements because a return for accounting periods ending 31 December 2015 will not normally be due until 31 December 2016. After that agents will have to use third party commercial software to file on behalf of clients.
HMRC has pointed out that a variety of commercial software is available for professional users at a range of prices: for example, single use software is available for between £25 and £50 and unlimited use packages for under £250.
HMRC also notes that some commercial software offers much greater functionality for agents. Information on commercial software suppliers can be found on GOV.UK: HMRC accepts returns filed using any of the products listed in this document.
In HMRC's opinion: "The UK has a highly competitive software industry that has developed a variety of low cost products for agents. It would be wrong for HMRC to use public sector resources and expertise to release rival products."
Share your views
Concerns have already been expressed to HMRC about the restriction of access to CATO. ICAS would welcome feedback from members on the proposed changes. Comments should be sent to firstname.lastname@example.org.