Ask Emily

Do I need to use accounting software to file my returns?

The short answer is probably not, at least at the moment. You can file self assessment tax returns, corporation tax, accounts and run payroll with free HMRC software, you can even send paper returns for self assessment if you prefer it (watch out for the earlier deadline though). There is a wealth of information available on the government website, including HMRC manuals for specific taxes. It’s in the government’s interest to make it as easy and accessible as possible to follow the rules and pay anything you owe.

The big exception is Making Tax Digital VAT which started in April 2019. If your business is over the VAT threshold of £85,000, you need to use MTD software to file, and there’s no free HMRC software to help you do it. There is low-cost bridging software though, which can convert your records from Excel.

VAT was the first on a roadmap of taxes the government plans to digitise, next in line are smaller VAT-registered businesses, income tax and corporation tax. From April 2020, capital gains from UK Residential Property need to be reported and paid within 30 days, and this is reported through the government’s digital service.

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