If you file corporation tax returns, HMRC’s latest consultation should be on your radar. On 10 March, HMRC published proposals to change how companies submit their tax computations—moving from the current flexible format to a standardised, fully tagged system.
For SME owners and finance directors, this isn’t just another regulatory tweak. It affects how you’ll file returns from 2027, potentially requiring new software and updated processes. Here’s what you need to know.
What’s Changing?
Since 2011, companies have filed their CT600 returns online, but the accompanying tax computations have stayed relatively flexible. You could structure them however made sense, as long as the key information was there.
That flexibility is ending. HMRC wants all corporation tax computations submitted in a prescribed format with standardised XBRL tagging. Think of it as moving from a free-form letter to filling out a specific form—same information, just in defined boxes.
The timeline:
- April to September 2026: HMRC works with software developers to refine requirements
- September 2026: Final specifications published
- October 2026 to September 2027: Software developers update their products
- October 2027 to September 2028: Live pilot phase (mandatory but with support)
- September 2028: Full enforcement begins
Why Is HMRC Doing This?
The official line is about improving data quality and consistency. There’s truth to that—current submissions vary wildly in format and completeness, making it harder for HMRC to process returns or spot errors.
But let’s be honest about what else is driving this: automation and risk assessment. Standardised, machine-readable data lets HMRC run automated checks on millions of returns instantly. The consultation document notes the corporation tax gap for 2023-24 was £18.6 billion—HMRC thinks better data will help close it.
For compliant businesses, that might not be a bad thing. Clearer standards mean less risk of innocent mistakes triggering enquiries.
What This Means for Your Business
Software costs: Your current accounting software will need updating to meet the new standards. Most mainstream providers will handle this, but check with yours. Smaller or specialist software may take longer to comply—or might not at all.
Time to prepare: If you use a major software package (Sage, Xero, QuickBooks, etc.), your provider will likely update before the deadline. But if you use bespoke or niche software, talk to your supplier now. The consultation closes 2 June, and HMRC will publish the final requirements by September.
More data required: Some businesses may need to provide more detail than they currently do. HMRC says this information should already be in your records—you just haven’t had to report it before. Still, it’s worth understanding what additional breakdowns might be needed.
Amendments going digital: From 1 April 2027, all amendments to company tax returns must be filed online. Currently, about 5% of amendments still arrive by post. If you’re in that group, you’ll need to adjust.
The Enforcement Question
HMRC is consulting on how to enforce compliance:
- An approved software list (only products meeting standards would appear)
- Blocking submissions from non-compliant software
- Potential penalties for software providers who repeatedly fail to meet standards
- Locking XBRL tags so users can’t alter them
That last point has raised eyebrows. Software would prevent you from changing certain tagged fields, even if you think there’s an error. HMRC argues this is needed to maintain data integrity, but critics worry it removes flexibility when legitimate edge cases arise.
Should You Respond to the Consultation?
If you’re an SME owner or FD using mainstream software, you can probably leave this to your software provider and professional body. They’ll be submitting detailed responses.
But if you use specialist software, have unusual tax positions, or employ in-house teams that would be affected by locked fields and prescribed formats, it’s worth making your voice heard. The consultation runs until 2 June.
What to Do Now
- Check your software. Contact your accounting software provider and ask about their timeline for compliance with the new corporation tax computation requirements.
- Review your processes. If you currently amend returns by post, start planning to move that online before April 2027.
- Monitor developments. HMRC will publish final specifications in September. That’s when you’ll see exactly what’s required.
- Budget accordingly. There may be software upgrade costs or additional time needed for compliance. Better to know now than be caught out in 2027.
The shift to standardised computations is coming. It’s another step in HMRC’s march toward fully digital tax administration. For most businesses, it’ll be a matter of software updates and minor process changes. But it’s worth understanding what’s ahead—especially if you’re not using mainstream software or have complex tax affairs.
The consultation document is available on gov.uk. If this affects you significantly, read it and respond by 2 June.