Last week, HMRC quietly confirmed that its plans to extend Making Tax Digital (MTD) to corporation tax have been scrapped. The announcement came buried within its updated transformation roadmap, a long and wide-ranging policy document.
Instead of pressing ahead with digitalisation for corporation tax, HMRC said it is now “developing an approach to the future administration of corporation tax that is suited to the varying needs of the diverse corporation tax population.”
It explained that the population includes a broad range of organisations, from small businesses and multinationals to charities and property management companies, but gave no further details.
MTD for Income Tax will still go ahead from April 2026 for self-employed individuals, sole traders and landlords earning over £50,000. However, there is currently no alternative roadmap or timeline for corporation tax reform.
HMRC did state that it remains “committed to consulting and providing early clarity and assurance on both the design and timing of changes.” It also intends to work closely with stakeholders to identify reforms that provide the best outcomes for both taxpayers and the Government.
In light of the Government’s broader aims to support growth and reduce regulation for businesses, the decision to shelve MTD for Corporation Tax is not entirely unexpected. It reflects growing concerns around administrative burden, cost, and digital readiness – particularly for smaller companies – as well as a political drive to cut red tape.
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