So in the latest change of direction (aka U-turn), HMRC has officially confirmed that Making Tax Digital for Corporation Tax is no longer happening.
After years of delays, limited pilot uptake, and mounting industry feedback, the government has decided to pull the plug. For many in the accounting and business world, it’s a relief.
What will replace MTD for CT?
While there’s no direct successor yet, a few clear signals are emerging.
- HMRC is still committed to digitalisation
Scrapping MTD for CT doesn’t mean a return to paper. HMRC will continue pushing for “smarter digital reporting” – just not in the one size fits all quarterly model MTD proposed.
We might see:-
> More structured digital submissions of annual CT600 returns
> Greater integration between commercial software and HMRC APIs
> Real-time data validation tools, especially for large corporates
2. Expect more automation, not more admin
MTD for CT was widely criticised for being too burdensome, especially for smaller companies. But HMRC still sees automation as the future.
Instead of mandating digital record-keeping, we might see incentives to adopt tech e.g. better insights, fewer audits, or faster repayments if digital submissions are used.
3. Data driven compliance will rise
Even without MTD, HMRC continues to build capabilities in risk profiling, cross-matching, and pre-population of data. The future may lie more in HMRC using existing data better, rather than asking businesses to send more of it.
In short, whilst MTD for CT is gone, the trend toward digital first tax compliance isn’t.
For the avoidance of doubt, MTD for VAT, and the introduction of MTD for Income Tax coming in April 2026, are unaffected by this announcement.
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