What is Making Tax Digital for Corporation Tax?
What is MTD for Corporation Tax?
Making Tax Digital (MTD) for Corporation Tax was a planned HMRC initiative that would have required limited companies to keep digital tax records and submit corporation tax information using compatible software.
HMRC cancelled the programme in July 2025, meaning companies will continue to manage corporation tax reporting under the existing system.
Quick answer
Making Tax Digital for Corporation Tax was an HMRC proposal designed to digitise corporation tax record-keeping and reporting for limited companies.
However, HMRC confirmed in July 2025 that it would not introduce MTD for Corporation Tax.
Existing corporation tax filing requirements remain unchanged, and there are currently no plans to make digital corporation tax reporting mandatory.
Jump to:
- What is MTD for Corporation Tax?
- Why did HMRC cancel MTD for Corporation Tax?HMRC confirmed that it will not introduce Making Tax Digital for Corporation Tax.
- What was MTD for Corporation Tax?
- Who would MTD for Corporation Tax have applied to?
- What did HMRC say about the cancellation?
- What does the cancellation mean for businesses?
- Who is affected by the cancellation?
- How does MTD for Corporation Tax compare with other MTD programmes?
- What other Making Tax Digital rules still apply?
- How can businesses prepare for future HMRC changes?
- Where is HMRC’s digital transformation programme heading?
- Frequently asked questions about MTD for Corporation Tax
Key takeaways
- HMRC officially cancelled Making Tax Digital for Corporation Tax in its July 2025 Transformation Roadmap.
- Limited companies will continue filing annual Company Tax Returns (CT600) under the current system.
- The cancellation only affects corporation tax. MTD for VAT and MTD for Income Tax continue as planned.
- Sole traders and landlords who meet the published income thresholds may still need to comply with MTD for Income Tax.
- Digital record-keeping remains a useful way to improve accuracy, visibility, and collaboration with accountants.
Why did HMRC cancel MTD for Corporation Tax?HMRC confirmed that it will not introduce Making Tax Digital for Corporation Tax.
This means limited companies will not need to keep digital records specifically for corporation tax or submit quarterly corporation tax updates using MTD-compatible software.
The decision was announced in HMRC’s July 2025 Transformation Roadmap.
HMRC stated that it wants to work with businesses, advisers, and other stakeholders to develop future corporation tax administration in a way that reflects the diverse nature of UK companies.
HMRC identified several factors behind the decision:
- Limited companies vary significantly in size and complexity, making a single reporting model difficult to implement.
- HMRC would need substantial technology and operational upgrades to support quarterly corporation tax reporting.
- Feedback from accountants, tax professionals, and business groups raised concerns about costs and administrative burden.
What was MTD for Corporation Tax?
Making Tax Digital for Corporation Tax formed part of HMRC’s wider programme to modernise the UK tax system.
The proposal would have required businesses to:
- Keep corporation tax records digitally.
- Use compatible software.
- Submit information to HMRC more frequently.
- Move away from manual record-keeping and paper-based processes.
The initiative followed the introduction of MTD for VAT and was expected to become the next stage of HMRC’s digital transformation programme.
Who would MTD for Corporation Tax have applied to?
MTD for Corporation Tax was intended to apply primarily to limited companies that pay corporation tax.
It was not designed for sole traders, who pay Income Tax on business profits rather than corporation tax.
Sole traders and landlords instead fall under the separate MTD for Income Tax programme, which is being introduced in phases from April 2026.
What did HMRC say about the cancellation?
HMRC made its position clear in the July 2025 Transformation Roadmap, stating that it does not intend to introduce MTD for Corporation Tax.
The announcement represented a full cancellation rather than a delay or revised implementation timetable.
Instead, HMRC is focusing on broader digital transformation initiatives and improvements to tax administration that can benefit a wider range of taxpayers.
What does the cancellation mean for businesses?
The cancellation removes the prospect of new corporation tax reporting obligations for limited companies.
Who is affected by the cancellation?
The decision affects businesses differently depending on their structure:
- Limited companies can continue filing corporation tax returns under existing rules.
- Sole traders and landlords may still need to comply with MTD for Income Tax if they meet the relevant income thresholds.
- VAT-registered businesses must continue following MTD for VAT requirements.
Small businesses and limited companies
Many small and medium-sized businesses had already begun evaluating software and processes in preparation for MTD for Corporation Tax.
The cancellation means those businesses no longer need to prepare for mandatory quarterly corporation tax reporting.
However, maintaining digital records can still help improve visibility over finances, support compliance, and simplify collaboration with advisers.
Larger organisations
Larger businesses often already operate sophisticated finance systems and digital processes.
While the cancellation removes the need to prepare specifically for MTD for Corporation Tax, many organisations may continue investing in digital finance tools to improve efficiency, reporting, and governance.
How does MTD for Corporation Tax compare with other MTD programmes?
| Tax area | Current status |
| Corporation Tax | Cancelled in July 2025 |
| VAT | MTD requirements continue to apply |
| Income Tax | Rolling out in phases from April 2026 |
What other Making Tax Digital rules still apply?
Although MTD for Corporation Tax has been cancelled, other parts of the Making Tax Digital programme remain in place.
MTD for VAT
MTD for VAT has been mandatory since April 2019 for eligible VAT-registered businesses. Businesses covered by the rules must keep digital records and submit VAT returns using compatible software.
MTD for Income Tax
MTD for Income Tax Self Assessment is being introduced in stages:
| Start date | Who it applies to |
| April 2026 | Sole traders and landlords with qualifying income above £50,000 |
| April 2027 | Sole traders and landlords with qualifying income above £30,000 |
| April 2028 | Sole traders and landlords with qualifying income above £20,000 |
How can businesses prepare for future HMRC changes?
While MTD for Corporation Tax is no longer planned, digital record-keeping remains good business practice.
Businesses may benefit from:
- Maintaining accurate and organised digital records.
- Reviewing whether their accounting software meets current operational needs.
- Keeping up to date with HMRC announcements and policy changes.
- Working with accountants or tax advisers to monitor regulatory developments.
Digital records can help reduce errors, simplify tax administration, and provide better visibility over business finances.
HMRC expects businesses to retain accurate records for tax purposes, regardless of MTD requirements.
Where is HMRC’s digital transformation programme heading?
Although MTD for Corporation Tax has been cancelled, HMRC continues to pursue wider digital transformation initiatives.
According to HMRC’s Transformation Roadmap, focus areas include:
- Artificial intelligence (AI) tools designed to support taxpayers.
- GOV.UK One Login, which aims to simplify access to government services.
- Exploration of future e-invoicing opportunities and standards.
Businesses should continue monitoring announcements from HMRC, as future digital tax initiatives may emerge in the coming years.
Frequently asked questions about MTD for Corporation Tax
Is there any chance HMRC will revive MTD for corporation tax?
HMRC’s July 2025 roadmap states no current plans to introduce MTD for corporation tax.
While digital transformation remains a priority, businesses can treat this cancellation as final for the foreseeable future.
What if I already invested in MTD software for corporation tax?
MTD-compatible software remains valuable for other compliance needs, such as MTD for VAT or Income Tax Self Assessment.
Many businesses also find that digital tools improve overall efficiency, record-keeping, and financial visibility, making the investment worthwhile regardless of MTD requirements.
Do I still file corporation tax returns digitally?
Yes, most companies already file their CT600 returns online through HMRC’s Corporation Tax Online service.
The cancellation of MTD for corporation tax doesn’t change this—it simply means you won’t face new requirements for quarterly updates or enhanced digital record-keeping.
Will this affect my obligations for other taxes?
No, the cancellation of MTD for corporation tax doesn’t affect your obligations for VAT, income tax, or payroll.
If you’re VAT-registered, you still comply with MTD for VAT. If you’re a sole trader or landlord, you still need to follow MTD for Income Tax Self Assessment rules based on the published timelines.
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