Filing by hand stopped being an option this year
Two things changed for UK businesses this year, and most owners have registered them separately without noticing they point the same way.
The first: the free joint filing service run by HMRC and Companies House closed on 31 March 2026. Since 1 April, a Company Tax Return has to go through commercial software recognised by HMRC. Filing your own accounts on a free web form, which thousands of small companies did every year, is no longer a route that exists. Companies House web filing still accepts accounts for now, and is expected to follow the same way in April 2027.
The second: Making Tax Digital for Income Tax started in April 2026 for sole traders and landlords with qualifying income over £50,000. By the middle of August, 436,000 people had submitted a first quarterly update and more than 570,000 had signed up. From this month, HMRC begins signing up people who should be in the scheme and have not registered themselves. The threshold drops to £30,000 next April.
We are a software company and not accountants, so the tax itself is a conversation for whoever does your books. What we can be useful about is the part nobody bills for: what these changes do to the systems you already run.
The direction is the story, not the deadline
Taken one at a time, each change is an administrative nuisance that your accountant absorbs. Taken together they describe a direction, and the direction has been consistent for a decade: reporting to government is becoming software-only, more frequent, and more detailed.
Software-only removes the option of a person retyping figures into a web form at year end. More frequent means the assembling of those figures stops being an annual event. More detailed means the numbers have to come from somewhere that actually holds them, rather than being reconstructed from memory and a bank statement in January.
None of that is a problem if your business already keeps its records in one place. It is a growing problem if the real information about your business lives in one system and the accounting lives in another, with a person in between.
The cost is not the software licence
When the free filing service closed, most of the commentary was about the new cost of a software subscription. For a small company that is real but modest, and the mainstream accounting packages already do what the rules require.
The cost that does not appear on an invoice is the retyping. In a lot of businesses the same figure is entered by a human being more than once: priced in the job system, then again on an invoice, then reconciled by hand when the two disagree. At once a year that is an irritation somebody absorbs in a quiet week. Four times a year, with points-based penalties arriving in April 2027 for those in the quarterly regime, it becomes a standing commitment with a date attached.
It also gets more expensive precisely when you are busiest, because reporting deadlines take no account of your season. A business that does most of its work in five months does not want its quarterly returns landing in the middle of them.
The question worth asking
Pick a single invoice from last month and trace it backwards. Where did that number first exist? Most likely it started as a price on a quote, became a job, got done, got signed off, and then became an invoice. Now count how many times a person typed it, or copied it, on the way through.
If the answer is once, you have nothing to fix and this article is not about you. If the answer is three or four, you have found the thing that quarterly reporting is going to make more expensive, and you have found it in the one place where the fix is measurable.
When connecting the two is worth it
Not always, and it is worth saying so plainly. If you raise a handful of invoices a month, a person entering them takes minutes and building anything would be a waste of money. Carry on.
The case becomes strong at volume, and stronger when the retyping goes wrong. Three signs it is time: the same figure is entered by hand more than once; the two systems regularly disagree and somebody has to work out which one is right; or the month end reliably takes days that the business feels. Each of those is a cost you are already paying, quarterly reporting simply raises the frequency.
What it looks like in practice is unglamorous. A job completed and signed off in the operational system raises the invoice in the accounting package by itself, carrying the customer, the reference and the amounts across, so the number is entered once and appears everywhere. Nobody exports a spreadsheet. This is ordinary work, we do it as part of building business systems, and it usually pays for itself in admin time before anyone counts the errors it stops.
What to do between now and April
Ask your accountant which regimes you and the company are actually in, because the answer differs depending on how you take income and whether you have property. Do it before April 2027 rather than after, because that is when penalty points begin for the quarterly regime and when Companies House is expected to go software-only for accounts.
Then do the invoice exercise above. It takes ten minutes and it tells you whether you have a systems problem or not. If it turns out you do, the fix is a normal piece of work with a normal payback, and worth costing properly rather than living with for another year. Our software cost calculator will give you a range in a couple of minutes.
Common questions
Does this affect my limited company, or only sole traders?
Both, differently. Every limited company is affected by the end of free joint filing: since 1 April 2026 a Company Tax Return must be filed using commercial software. Quarterly reporting under Making Tax Digital for Income Tax is separate, and currently applies to sole traders and landlords with qualifying income over £50,000, dropping to £30,000 in April 2027. Plenty of company owners are caught by both, because the company files its return while they personally have property income.
My accountant handles all of this. Do I need to do anything?
For the filing, probably not, and that is a question for them rather than for us. What changes on your side is the supply of information. More frequent reporting means they ask for figures more often, and if those figures are assembled by exporting from one system and retyping into another, that work now happens four times a year. The filing is their problem. Where the numbers come from is yours.
Do I need to replace my accounting software?
Almost certainly not. The mainstream packages already handle the requirements. The gap is rarely the accounting package: it is the operational system alongside it, holding the jobs, quotes and timesheets, with no way of passing what it knows across.
Is it worth connecting our job system to our accounts software?
It depends on volume and on how often the retyping goes wrong. A few invoices a month does not justify building anything. The case gets strong when the same figure is entered by a person more than once, when the two systems regularly disagree, or when the month end takes days the business notices. Reporting frequency makes all three worse, which is what changed this year.