No more free filing – What small businesses need to know about the end of CATO

If your business has benefited from using HM Revenue & Customs’ (HMRC’s) free, online tax filing service, we’ve got bad news for you.

HMRC has announced that the free service will close on 31 March 2026.

From 1 April 2026, businesses will need to use commercial software to file annual accounts and Company Tax returns with HMRC.

With these changes only 12 months away, here’s what you need to know about them – and what you can do to prepare.

Why is HMRC abolishing the service?

Company Accounts and Tax Online (CATO) is a joint scheme by HMRC and Companies House that enables eligible businesses to file annual accounts and tax returns at the same time through an online, free service.

CATO was designed to help smaller businesses with fairly simple, straightforward tax obligations.

Single UK companies with a turnover of no more than £632,000 and/or rental income exceeding £5,200 are currently eligible for CATO, although reporting certain costs and allowances can disqualify a company from using the service.

HMRC has reasoned that CATO “does not meet modern digital standards, or recent changes to UK company law,” and that commercial software can offer better services to small businesses.

From 1 April 2026, therefore, businesses will need to use commercial software to file Company Tax returns with HMRC.

You can continue to file annual accounts with Companies House using either third party software, web services, or paper filing.

What to do next

Businesses currently filing their tax returns through CATO are advised to start preparing for the transition to a commercial software provider sooner rather than later.

HMRC has provided a list of commercial software suppliers that can produce one or more of the elements required for a Company Tax return.

Additionally, from 1 April 2026, you will no longer be able to access your previous returns submitted through CATO.

Therefore, HMRC recommends that you download and save the last three years of tax returns filed, as a minimum, before 31 March 2026.

Furthermore, while you can still use web services or paper to file annual accounts with Companies House, the agency will eventually require all businesses to use commercial software.

Companies House aims to give a minimum of 21 months’ notice before implementing this change.

Take control of your tax returns with Butterworth Barlow

Managing company tax returns can be a complicated and time-consuming part of running a business – but with Butterworth Barlow, it doesn’t have to be.

We can prepare company tax returns and annual accounts on your behalf, ensuring they’re accurate and submitted on time.

With expertise in the latest commercial software, we’ll advise you on choosing and integrating your new tax filing solution.

As Gold Xero Partners, we can help you harness the full power of the UK’s leading cloud accounting software. With Xero, you can file digital company tax returns effortlessly, track cash flow, and stay on top of your business finances.

Need help filing your company tax returns? Contact us today for expert advice and guidance.