New versions are required to handle changes to the PAYE tax rules, which have changed every few months recently. There was a change announced this month which takes effect next month.
If you don't use the updated version, you'll calculate and pay the wrong monthly tax to yourself and your employees.
This is designed for small employers - they want something easy like a website, not specialist software they need to install with a database that must be backed up manually.
For those businesses with extreme corner cases ("we don't have internet", "we only pay employees on the full moon", etc), let them continue to use the old paper forms.
Don't think HMRC accepts this in 2024.
They're actually going in the opposite direction. It was possible to file VAT on HMRC's website a couple of years ago, but they've taken that option away. Now you have to use 3rd party software to file VAT.
It's because they added requirements that your filing software is linked to whatever system you use for business accounts, even if it's a spreadsheet for now.
For PAYE, you can use HMRC's tool described in the article, if you're a small enough business, or 3rd party tools, which could be a webapp or not, or your accountant's services.
I agree, a webapp would be much more sensible for PAYE, as it could keep up with the monthly rule changes. If you have a registered business, you already have the login, form-filling support etc you would need, as it is used for other taxes and admin on HMRC's site. In a twist, the HMRC tool the article is about is actually a webapp that runs locally.
For Corporation Tax, you have to use 3rd party software or services. That's been true for a long time. Historically this software was expensive, so most people ended up using an accountant's services even if just to be able to file Corporation Tax after doing their own accounts. It's more accessible now. You can file it on HMRC's website if the company accounts are simple enough. You can file it at the same time as the Companies House statements, if you're organised enough.
For Income Tax from your business, that's going to change to require your filing software to be linked to the system you use for business accounts too, in 2026 or 2027 depending on size of business. I guess that might mean you won't be able to file income tax on HMRC's website any more.
In 2024, tax software ought not to have the tax rules hardcoded, but instead ask the tax authority for a fresh set of rules at startup every time, and alert the user if the rules database ever gets more than 30 days out of date.
Nearly every government makes tax rule changes every year - it just isn't reasonable to hardcode them and require the user buy/install new software every year.
The changes go beyond tax band thresholds and percentages across NIC & IT. Eg the (now-scrapped) Health & Social Care Levy would've been a completely new tax - you need a complex schema to encode that and even then the Treasury will come up with something you haven't thought of next.
Tax rules are very complicated and often can't just be expressed as an entry in a database. In that context, downloading a fresh set of rules at startup is effectively the same as auto-updating.