HMRC is consulting on what looks like a quiet bureaucratic tweak. It’s not. The modernisation of company tax returns will affect every finance director, every tax team, and every accounting software provider in the UK within 18 months. If you haven’t paid attention yet, now’s the time.
The Problem They’re Solving
Company tax returns (CT600) have always allowed flexibility in how you present computations—the detailed reconciliation between accounting profit and taxable profit. Sounds reasonable. In practice, it’s created a mess.
HMRC says “too much divergence has evolved over time … resulting in significant variation in how essentially similar information is presented.” That’s civil service speak for: nobody can read these returns consistently, data’s all over the place, and both humans and systems struggle to extract what they need.
The result? Key information gets omitted, presented ambiguously, or formatted in ways that defeat both interpretation and automation. HMRC’s been working with software developers and professional bodies like ICAEW since 2024 to fix it.
The Solution: Full Prescription
Instead of letting companies decide how to format and tag computations, HMRC wants a standardised, fully tagged format using eXtensible Business Reporting Language (XBRL). No more flexibility.
They’ve already tested this with accounts adjustments and capital allowances in 2025. Now they’re proposing to extend it to all computations submitted with the CT600.
Amendments to company tax returns would also go fully online—no more paper letters claiming you’ve changed something. Everything via HMRC’s digital portal, with defined exemptions for digital exclusion and returns under enquiry.
The Timeline: A Two-Year Rollout
HMRC understands the lift is significant. Software providers are already stretched with Making Tax Digital for income tax and Pillar 2 reporting. So they’re spacing this out:
– April–September 2026: Collaborative development of draft specifications with software developers – By end September 2026: Final full prescription published – October 2026–September 2027: Build and test period for software updates – October 2027–September 2028: Live pilot phase—all returns must conform, but enforcement is light-touch – October 2028 onwards: Full enforcement
That gives you 18 months to prepare. Not infinite, but workable if you start now.
What This Means for Your Finance Team
First, your software won’t handle the new format yet. Your provider will need to update their system during 2026–2027. This involves database schema changes, new validation logic, and extensive testing. Budget for that conversation by mid-2026.
Second, audit and tax teams will need retraining. The standardised format removes ambiguity, which is good for compliance, but it also means you can’t bury awkward items in creative presentation. Your computations need to be crystal clear.
Third, if you’ve been using non-standard approaches to presentation—burying items, using bespoke formats, splitting certain adjustments in non-obvious ways—you’ll need to rethink. The new prescribed format won’t accommodate that. Plan for it now rather than discovering it in 2027.
The Enforcement Question
HMRC’s proposed enforcement has three flavours:
1. Approved software list: Only products tested and certified by HMRC appear on an official list. Software vendors care about this because being blacklisted is commercial death.
2. Submission blocking: HMRC could refuse to accept non-compliant filings “in the most egregious cases.” Safeguards and prompt communication would apply, but this is a stick.
3. Vendor penalties: If a software provider deliberately or repeatedly breaches the rules, HMRC can fine them directly.
They’re also locking tags—users won’t be able to alter or remove them. This kills one class of problem: people trying to bypass the system by editing XBRL tags after software submission.
HMRC’s preference is voluntary compliance backed by the threat of enforcement. That’s realistic. Most firms will comply once the software update rolls out. Edge cases and deliberate non-compliance will get caught.
Who Should Respond to the Consultation?
The consultation closes 2 June 2026. If you’re running a large corporate with complex computations, consider submitting a response directly. If you use a tax advisor, they’ll likely respond through their professional body—ICAEW’s Tax Faculty is coordinating the profession’s input.
Things worth raising if you do respond:
– Whether the timeline is realistic for your software provider – Any specific computation adjustments that might not fit the prescribed format – Whether the exemptions for amended returns are broad enough for your circumstances
What You Need to Do Now
1. Notify your finance team and tax advisors: This isn’t a surprise next year. Plan for it now.
2. Check your software roadmap: Contact your accounting software provider and ask when they’ll be ready. Hold them to a timeline.
3. Audit your current computations: Are you using non-standard presentation methods? If so, flag them for reworking before the new format becomes mandatory.
4. Understand the pilot phase: October 2027–September 2028 is when you’ll file under the new rules for the first time without full enforcement. Use that as your actual go-live date internally; don’t wait until enforcement kicks in.
The Bigger Picture
This isn’t just HMRC being tidy. It’s part of a pattern: Making Tax Digital for income tax, Pillar 2 reporting, and now standardised computations. The direction is clear—centralised data, automated processing, less room for interpretation.
If you’re a CFO trying to keep tax reporting simple, that window’s closing. The future rewards discipline and penalises ambiguity. Better to adapt now than scramble when enforcement starts.
The consultation is live. The clock’s ticking. Plan accordingly.
—
Got questions about how this affects your business? Get in touch—I can help you map out the transition and make sure you’re ready when the new format goes live.