Hot off the press: No Making Tax Digital for Corporation Tax

Important Update

HMRC has officially confirmed that Making Tax Digital (MTD) will not be extended to Corporation Tax, at least for the foreseeable future, following years of speculation. This announcement comes from its July 2025 Transformation Roadmap, which outlines HMRC’s long-term digital plans.

Rather than MTD applying to Corporation Tax, HMRC will move its focus to:

• Upgrading internal systems used to manage Corporation Tax.

• Improving the online compliance tools for companies.

• Developing more tailored reforms, suited to a broad range of Corporation Tax payers.

This is welcome news for many small and medium-sized companies that were concerned about the potential costs and complexity of quarterly digital reporting for Corporation Tax.  However, this does not affect the MTD rollout for other taxes:

• MTD for VAT remains mandatory for most VAT-registered businesses.

• MTD for Income Tax Self Assessment (ITSA) will apply to any sole trader business and private landlords in stages:

From April 2026: Turnover over £50,000

From April 2027: Turnover over £30,000

From April 2028: Turnover over £20,000

If you also have a sole trader business or are a landlord, we will continue to guide you through the changes to ensure compliance and a smooth transition.

Should I incorporate my business?

Although the scrapping of MTD for Corporation Tax may make incorporating your business seem more appealing, there are many factors to consider. If you think that incorporating might be right for you, please speak to us for guidance about what is best for you and your business.

What does this mean for my incorporated business?

There is currently no need to prepare for MTD-style digital reporting for Corporation Tax.

Corporation Tax returns will continue as they currently are, although you may notice gradual changes to HMRC’s online services over time.

We will continue keep you informed of any relevant changes that could affect how you manage your tax obligations.

Although MTD for Corporation Tax is no longer going ahead, HMRC still has plans to be a “digital-first” tax authority by 2030. Planned changes include:

• More use of Artificial Intelligence and third-party data.

• A unified GOV.UK One Login for all tax services.

• Possible future introduction of e-invoicing.

• Continued investment in digital services.

We are here to help

If you have any concerns about what any of this means for your business, please get in touch.  We are here to support you to stay compliant and make tax as simple as possible.