No plans for MTD for corporation tax, says HMRC

HMRC has formally confirmed it will not proceed with Making Tax Digital (MTD) for Corporation Tax, drawing a line under years of uncertainty over its potential rollout.

In the HMRC Transformation Roadmap, the department 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 statement marks the first clear indication that MTD for Corporation Tax has been removed from the digital tax administration agenda.

HMRC’s focus will now turn to upgrading legacy internal systems, improving digital services incrementally, and working with stakeholders on alternative reforms tailored to the “diverse CT population”.

The roadmap notes that this population includes “a very wide range of entities and situations, from small businesses to multinationals, from charities and property management companies to unincorporated associations”.

HMRC states it is committed to consulting on any future changes and offering early clarity on both design and timing.

The decision not to pursue MTD for CT comes as the department commits to rolling out MTD for Income Tax Self Assessment (ITSA) in stages from April 2026 for sole traders and landlords earning over £50,000, expanding to those earning over £30,000 in 2027 and £20,000 in 2028. MTD for VAT remains mandatory for most businesses and has already been widely adopted.

While MTD for ITSA is framed as a key driver of compliance and simplification, Corporation Tax will follow a different path.

HMRC will instead prioritise targeted internal system upgrades and improve the CT compliance experience through other digital reforms.

Elsewhere in the 129-page roadmap, HMRC outlined broader plans to become a “digital-first” tax authority by 2030, including:

• Transitioning customers to GOV.UK One Login.
• Expanding the use of AI-powered tools for compliance and customer support.
• Increasing third-party data use to pre-populate returns and issue intelligent digital nudges.

The roadmap also highlights HMRC’s intention to support small businesses through expanded use of MTD for Income Tax and explore e-invoicing as a future avenue for reducing errors and administrative burdens.

A joint consultation with the Department for Business and Trade closed in May 2025, with responses currently under review.

The decision to shelve MTD for Corporation Tax is likely to be welcomed by many within the profession who had raised concerns about its complexity and cost implications, particularly for smaller incorporated entities.

However, HMRC has made clear that the broader goal of digital reform remains firmly in place, albeit through more flexible and differentiated approaches.

JP Marks, HMRC’s First Permanent Secretary and Chief Executive, said in the roadmap’s foreword:

“HMRC will look very different by 2030… Almost all our straightforward customer queries will be handled digitally or automatically with at least 90% of customer interactions being digital.”