HMRC has confirmed that Making Tax Digital (MTD) for corporation tax will not be implemented until 2026 “at the earliest”. In a consultation document, HMRC revealed potential designs of the MTD for corporation tax system, and provided businesses with information on what might be required from them under the scheme.
Afford Bond Director, Paul Edwards said: “The document considers how the principles established for MTD could be implemented for organisations that pay corporation tax. And HMRC is also seeking feedback from agents and companies regarding the plan so we will feedback key points from working with our clients.”
“For example, VAT-registered businesses with a taxable turnover above the VAT threshold of £85,000 are currently required to follow the MTD rules by keeping digital records and using software to submit their VAT returns,” said Paul Edwards.
HMRC has also announced self-employed businesses and landlords with business or property income over £10,000 will need to follow the rules for MTD for income tax for their first return period starting on or after 6 April 2023.
Commenting on the plans, the joint Association of Taxation Technicians and Chartered Institute of Taxation digitalisation and agent services committee, said:
“We are disappointed that the consultation presupposes that most entities within the charge to corporation tax should be within the scope of MTD, before the costs and benefits arising to different parts of the population have been established. If a key purpose of MTD is to encourage taxpayers to become digital then it is not necessary to extend it to corporation tax, as a large proportion of companies are VAT-registered and so already in MTD for VAT, or using digital records anyway.”
“As soon as we have any further information, we will update you,” said Paul Edwards, “but if you need expert tax advice or guidance in the meantime, please do not hesitate to contact us.”