FIVE KEY CONSIDERATIONS FOR YOUR CT600 SWITCH

By Steve Cox, product director at IRIS Software

So the time has come. HMRC is saying goodbye to UK agents who rely on its free CT600 service. A recent statement by HMRC announced the withdrawal of the service to be replaced by an online return, known as Company Accounts and Tax Online.

The new service, called CATO for short, will not be made available to agents this time around, leaving a potential 300,000 accountants on the lookout for a new system. So what do they need to know? This article explores the five considerations accountants should bear in mind before making the switch.

A change? But why? 

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It’s a simple refocusing by HMRC. The government and its various departments are going through a revised digital strategy and this change will be an important part of this. The reason being the government needs to build a closer relationship with the tax payer and the convenience of digital services is the answer. We have seen this previously with the new user friendly online car tax system and now we are seeing it extended to the HMRC.

The impact for accountants is increased as the previous CT600 system wasn’t meant to be used by agents at all. It was a service never intended for intermediaries, but became a free tool most used rather than just the intended end-user audience.

HMRC estimate around 300,000 UK agents will now be adding Find an alternative CT600 solution to their to do list and the clock is ticking. Accountants will require an alternative system for clients’ corporation tax returns with accounting periods ending on or after 1st January 2016; sooner than most may have expected.

So where do they start?

Cost

This is inevitable. The HMRC system was free to use, so a new cost will be incurred during the move. However, consider the pricing model when looking for a provider. There are usually two options. The first is to pay an annual licence subscription, which is more beneficial if you have many returns to complete and will save money in the long term. If you handle a relatively low number of returns, then a pay as you go option for each individual return submitted to HMRC will be more cost effective.

Functionality

Functionality changes depending on which system you choose, so consider what would suit your needs best. If you’d like a direct replacement for the HMRC system, then consider a similar form-based solution.

If you feel the change is an opportunity for you to review the software you currently have in place, such as accounts, company administration and practice management, look for a provider with an integrated CT600 solution.

Finally, if you are already using accountancy software you’re happy with, check with your provider to see if you can extend your coverage to include CT600.

On-premise or in the cloud?

Another consideration is around the underlying technology. Would you prefer to have the CT600 software installed on your practice server or available in the cloud, providing access over the internet anywhere in the world?

Both have their merits, however if this is a solution you’re planning to use in the long term, then a cloud based solution would be a more suitable option.

The UK workforce being tied to a desk is becoming a thing of the past and we will see all key systems moved to the cloud within the next year or so to accommodate this. Therefore if this is a long term solution, a cloud system will hold you in good stead.

Support

With any move, it’s good to have assistance. Consider what added value a provider can offer to help your move from HMRC.

With good technical support, an accessible knowledge base and training readily available, your move from HMRC can be as painless as possible.

Experience

CT600 solutions have been available for some time and some agents made the move well in advance of the deadline. Therefore, consider what has already been learnt. The experience of solution providers will be a key element to moving away from HMRC.

There are already a large number of professionals using software providers to complete CT600s and the benefit for anyone making the move now is the wealth of experience already in place.

It’s not too late

There is still time to make the change. However, it cannot be put on the back-burner any longer. HMRC’s current free software is now at its end, but by following the considerations above the process of change should be as painless as possible and deliver efficiency benefits in the long term.

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