What Closed and Why
The CATO portal was introduced in 2011 as a joint service between HMRC and Companies House. It allowed small companies to prepare a basic CT600, attach accounts, and submit both to HMRC and Companies House simultaneously — entirely online and at no cost. For micro-entities with straightforward affairs, it worked adequately.
HMRC’s stated reasons for closure are threefold. First, the service does not meet modern digital standards and cannot support the iXBRL (Inline eXtensible Business Reporting Language) tagging that HMRC now requires for all corporation tax submissions. All CT600 returns must be accompanied by accounts in iXBRL format — a digital tagging standard that enables HMRC to automatically cross-reference data with Companies House filings. The free tool was never built for this.
Second, the Economic Crime and Corporate Transparency Act 2023 (ECCTA) requires enhanced data validation and greater accuracy in company filings. A manually typed web form cannot deliver the structured, machine-readable data that ECCTA compliance demands.
Third, the closure reflects the same direction set by HMRC’s Making Tax Digital programme. Corporation Tax has not been brought into MTD’s mandatory scope, but CATO’s retirement moves the same way — away from manually typed web forms and toward structured, software-generated submission.
For practices advising clients on what the CT600 requires and how the corporation tax computation is structured, the guide to company tax return obligations and deadlines covers the filing requirements in full.
Who Is Affected and What They Need
The closure affects every UK company registered for corporation tax. However, the practical impact is concentrated in three groups that accounting practices are most likely to encounter as new or re-engaged clients:
Self-Filing Directors
Dormant Companies
The issue may also affect dormant charitable trading subsidiaries and non-trading entities operating within the charities and non-profit sector, many of which remain subject to corporation tax filing requirements despite limited activity. The volume of affected dormant companies is significant — HMRC estimates over 500,000 dormant companies are currently on the register.
Flat Management Companies and Non-Trading Entities
Flat management companies, residents’ associations, and similar entities that have historically managed their own minimal filing within the wider real estate sector are also caught. These companies often have no relationship with an accounting practice and no established software. The closure creates an unmet need that is squarely within the scope of an accounting practice’s CT compliance offering.
Company Type | Previous Filing Route | From April 2026 | Practice Opportunity |
Micro-entity (turnover < £632k) | CATO portal — free | Commercial software required | New CT compliance clients |
Dormant company | CATO portal — free | Commercial software required | High-volume low-complexity work |
Flat management company | CATO portal or paper | Commercial software or paper only | Often unrepresented |
Small active company | CATO or commercial | Commercial software only | Existing clients needing review |
Practice’s existing clients | Practice’s own software | No change — already compliant | No action required |
What Practices Need to Be in Place
For practices that have been managing CT compliance for their established client base, the CATO closure itself requires no process change — their software was already handling iXBRL submissions. The operational question is how to handle the inflow of new or returning clients who no longer have a self-service option.
Software Infrastructure
HMRC-recognised CT filing software must support iXBRL-tagged accounts and CT600 submission. The main platforms used by accounting practices — including Iris, CCAB-compliant modules within Xero, Sage, and QuickBooks, as well as dedicated CT tools such as TaxCalc, CCH, and Alphatax — all meet this standard. Practices should confirm their current platform covers all client entity types, including dormant companies and companies with a non-standard accounting period.
Preserving Historic Filing Records
For any clients who were self-filing through CATO, practices now need to establish what historic records exist. Post-31 March 2026, HMRC’s CATO portal is inaccessible — previous submissions cannot be retrieved through it. Clients who did not download their returns before the closure date will need to reconstruct their filing history from correspondence, bank records, or underlying bookkeeping records. Practices onboarding these clients should treat historic record retrieval as a first step in the engagement.
Capacity for New Low-Complexity CT Work
The commercially interesting opportunity in the CATO closure is the volume of low-complexity CT work that now needs a professional filing route. A dormant company CT600 or a micro-entity return with simple income and expenses is not a technically demanding engagement. But at volume, it is a meaningful capacity question.
Practices that have a clear, efficient process for handling straightforward CT returns, supported by scalable accounting outsourcing services, can absorb a significant number of new clients without proportional growth in senior staff time.
For practices advising newly onboarded clients on structuring their affairs efficiently, the guidance on reducing corporation tax through allowable deductions and reliefs is a useful resource to share during the initial review.
The iXBRL Requirement: What It Means in Practice
The mandatory iXBRL tagging requirement is the technical change that makes the CATO closure permanent rather than temporary. iXBRL (Inline eXtensible Business Reporting Language) is a format that embeds machine-readable tags into the HTML of submitted accounts, allowing HMRC to automatically parse financial data rather than manually reviewing it.
For accounting practices, this is not new. Commercial filing software has handled iXBRL tagging automatically for years. The accounts are prepared in the normal way; the software generates the tagged output and packages it with the CT600 for submission. Practitioners do not need to manually apply tags.
The practical implication for clients taking on the work themselves is that they cannot simply type numbers into a web form any more. The submission requires a software layer that generates valid iXBRL. This is why HMRC has no viable free alternative to offer — building a free tool that correctly generates iXBRL across the full range of company types and accounting periods is not a simple web form rebuild.
For practices explaining this to newly unrepresented clients, the key message is straightforward: the filing requirement has not changed, the software requirement has. The CT600 is the same form. The deadlines are the same. The tax calculation is the same. What changed is that the submission must now go through software that generates a correctly formatted, digitally tagged file.
Managing the Capacity Increase
The CATO closure is creating a measurable increase in inbound enquiries for accounting practices with a visible CT compliance offering. Handling that increase without compromising service quality for existing clients requires either additional internal capacity or a different delivery model for the straightforward CT work.
The characteristics of newly unrepresented CATO users — micro-entity companies, dormant entities, simple one-director businesses — make them well suited to a standardised, fixed-fee CT preparation process. These engagements do not typically require complex advisory input. They require accurate accounts preparation, a correct CT computation, a valid iXBRL submission, and confirmation of payment deadlines.
Practices managing a growing volume of this type of work alongside their existing client base often find that the preparation and computation stages are the capacity constraint — not the review or advisory element. Separating the preparation from the sign-off function, whether through internal delegation or an outsourced preparation model, allows the practice to absorb more CT work without the senior review function becoming the bottleneck.
Befree provides CT return preparation and tax compliance support to accounting practices managing multi-client CT workloads. For practices evaluating their capacity options as CATO-displaced clients come through the door, the tax outsourcing service provides a structured preparation model that works within the practice’s own review and sign-off process.
Frequently Asked Questions
When did HMRC close its free corporation tax filing service?
The HMRC Company Accounts and Tax Online (CATO) service permanently closed on 31 March 2026. From 1 April 2026, all UK limited companies must use HMRC-recognised commercial software to file their CT600 corporation tax return. There is no free government alternative, and no grace period has been announced.
Which companies are affected by the CATO closure?
–All UK limited companies registered for corporation tax — including active trading companies, dormant companies, micro-entities, and flat management companies
–The impact is greatest for companies that were self-filing through the free portal rather than using an accountant or commercial software
–Companies whose accountants were already using commercial filing software are unaffected operationally — the change is transparent to them
–Dormant companies — of which there are over 500,000 on the UK register — are required to file nil CT600 returns and are equally subject to the software requirement
Can companies still access their historic CATO submissions?
No. The CATO portal is offline, and previous submissions filed through it cannot be retrieved. HMRC advised companies to download at least three years of returns before 31 March 2026. For clients who did not do this, historic records may need to be reconstructed from paper correspondence, bank records of tax payments, or by submitting a formal information request to HMRC. Practices onboarding these clients should treat historic record retrieval as a priority task in the initial engagement.
What are the penalties for missing a corporation tax filing deadline?
If a Company Tax Return (CT600) is filed late, HMRC may apply the following penalties:
- £200 penalty one day after the filing deadline
- Another £200 penalty if the return is more than three months late
- A 10% penalty on any unpaid Corporation Tax if the return is more than six months late
- A further 10% penalty on any unpaid Corporation Tax if the return is more than twelve months late
What is iXBRL and why is it required for CT600 submissions?
iXBRL (Inline eXtensible Business Reporting Language) is a digital tagging format that embeds machine-readable labels into the HTML of submitted accounts. HMRC requires all corporation tax submissions to include iXBRL-tagged accounts so that financial data can be automatically processed and cross-referenced. Commercial filing software generates iXBRL tagging automatically as part of the submission process. The free CATO tool had limited iXBRL capability, which was one of the primary technical reasons for its closure.
How should an accounting practice handle the increase in CT clients after the CATO closure?
–Identify which existing clients were previously self-filing — they may now need full CT preparation support
–Confirm that the current filing software supports all relevant company types, including dormant entities and companies with non-standard accounting periods
–Develop a fixed-fee service structure for low-complexity CT work, since newly unrepresented clients are typically micro-entities with straightforward affairs
–Assess capacity: the preparation and computation stages are the bottleneck for high-volume CT work, not the review function
–Consider whether an outsourced preparation model — handling first-pass CT computations and account preparation — would allow the practice to absorb new CT clients without senior staff time becoming the constraint