HMRC makes changes about Making Tax Digital for Corporation Tax
According to an article written by AccountingWEB. In a significant shift in its strategy, HMRC has officially scrapped plans to roll out Making Tax Digital (MTD) for Corporation Tax (CT).
The announcement, quietly embedded in HMRC’s latest Transformation Roadmap, marks a notable departure from the original vision of a fully digital tax system.
Why Has MTD for Corporation Tax Been Abandoned?
Originally envisioned as part of a broader move toward a fully digital tax system, MTD for Corporation Tax aimed to bring similar changes to those already seen in VAT and (soon) Income Tax. However, after years of delays and limited progress, HMRC has now confirmed that it will not proceed with the rollout.
The reason? HMRC says it wants to develop a new approach that better reflects the diverse nature of the Corporation Tax population — from small businesses and charities to large multinational corporations.
What Was the Original Plan?
Under the proposed MTD for CT framework, companies would have been required to:
- Maintain digital records
- Submit quarterly updates to HMRC
- File annual Corporation Tax returns using MTD-compatible software
While this mirrored the structure of MTD for VAT and Income Tax, many in the industry questioned its value — especially for businesses already using digital systems.
Industry Reaction: A Welcome Dose of Clarity
The response from tax professionals has been largely positive. Emma Rawson, Director of Public Policy at the Association of Taxation Technicians (ATT), noted that the complexity of Corporation Tax made it a poor fit for MTD. She also highlighted that many businesses already keep digital records, so the proposed changes would have added little benefit while increasing administrative burdens.
What’s Next for Digital Tax?
While MTD for Corporation Tax is no longer on the table, HMRC remains committed to digital transformation. The roadmap outlines ambitions for a more automated, streamlined, and self-service tax system in the future.
For now, however, Corporation Tax will remain outside the MTD framework — offering businesses some breathing room and a chance to focus on other compliance priorities.
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July 2025
