HM Revenue & Customs (HMRC) has officially confirmed that it will not introduce Making Tax Digital (MTD) for Corporation Tax, ending years of uncertainty around the potential digital reporting requirements for UK companies.
The announcement was made in HMRC’s latest Transformation Roadmap, which sets out the future of UK tax administration and digital reform.
For accountants, bookkeepers, and business owners, this is a significant development in the ongoing rollout of Making Tax Digital (MTD) in the UK tax system.
In the roadmap, HMRC states:
“HMRC will modernise services for Corporation Tax (CT), beginning with a renewal of internal systems for CT to provide the foundation for future improvements. HMRC do not intend to introduce MTD for CT…”
This confirms that MTD for Corporation Tax is no longer part of HMRC’s digital tax roadmap, despite previous speculation that it could eventually mirror MTD for VAT and Income Tax.
Corporation Tax covers a wide and complex range of organisations, including:
- Small limited companies
- Large multinational groups
- Charities
- Property management companies
- Unincorporated associations
HMRC has indicated that due to this complexity, Corporation Tax will instead be modernised through internal system upgrades and incremental digital improvements, rather than a full MTD-style rollout.
What Is Happening With Making Tax Digital (MTD)?
While MTD for Corporation Tax has been dropped, Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) is still going ahead.
The rollout timetable is as follows:
- April 2026 – businesses and landlords earning over £50,000
- April 2027 – those earning over £30,000
- April 2028 – those earning over £20,000
At the same time, MTD for VAT remains mandatory for most VAT-registered businesses and continues to form the foundation of HMRC’s digital tax system.
HMRC continues to position MTD for Income Tax as a way to improve tax compliance, accuracy, and real-time reporting, particularly for sole traders and landlords.
HMRC’s Wider Digital Tax Transformation Strategy
Even without MTD for Corporation Tax, HMRC remains committed to becoming a fully digital tax authority by 2030.
Key elements of the HMRC digital transformation strategy include:
- Expansion of GOV.UK One Login for secure digital access
- Increased use of AI and automation in tax compliance and customer support
- Greater use of third-party data to pre-populate tax returns
- Introduction of intelligent digital prompts (“nudges”) to reduce errors
- Continued exploration of e-invoicing to streamline business reporting
- Ongoing modernisation of legacy Corporation Tax systems
HMRC has stated that its long-term goal is for the majority of taxpayer interactions to be digital or automated, reducing manual processing and improving efficiency across the tax system.
Impact on Businesses and Accountants
The decision not to proceed with MTD for Corporation Tax is likely to be welcomed by many small businesses, limited companies, and accountancy professionals.
Concerns had previously been raised around:
- Increased compliance costs
- Software and systems changes
- Administrative burden for small incorporated businesses
- Complexity across diverse company structures
By stepping away from a mandatory MTD framework for Corporation Tax, HMRC has reduced immediate pressure on UK companies to adapt to further digital reporting requirements.
However, it is important to note that HMRC digital tax reform is still very much ongoing, with continued focus on VAT, Income Tax, and broader system automation.
What This Means Going Forward
While Corporation Tax will not move to Making Tax Digital, businesses should still expect:
- Further digitalisation of HMRC systems
- Increased automation and data sharing
- Stricter real-time reporting expectations in other tax areas
- Continued expansion of MTD for Income Tax and VAT compliance requirements
The direction of travel remains clear: UK tax administration is becoming increasingly digital-first, even if the rollout is now more phased and selective.
Final Thoughts
HMRC’s decision to remove MTD for Corporation Tax provides clarity for businesses and accountants after years of uncertainty. However, it does not signal a slowdown in digital tax reform.
Instead, the focus is shifting towards a more targeted, flexible and technology-driven approach to improving compliance and reducing administrative burden across the UK tax system.
At Your Ledger, we continue to monitor all HMRC updates, Making Tax Digital changes, and UK tax compliance developments, helping businesses stay informed, compliant, and prepared for what comes next.
yourledger.co.uk 
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