Interesting news for companies preparing for Making Tax Digital (MTD) – HMRC has scrapped its plans for expanding the rollout to include Corporation Tax.
However, the tax agency will be rolling out new digital services in the next couple of years, which have been outlined online in HMRC’s Transformation Roadmap.
So, if you pay Corporation Tax, what can you expect in 2025–2026?
No more MTD for Corporation Tax
With Making Tax Digital for Income Tax becoming mandatory from April 2026 and April 2028 onwards, the corporate element was already pushed down the priority list.
However, after putting off the confirmation of an introduction date, HMRC has now officially abandoned MTD for Corporation Tax. Without enforcing digital record-keeping software, the tax agency will need to find other ways to modernise its administration.
As the Corporation Tax gap has now risen to almost 16%, there will be pressure to find a quick solution.
New Corporation Tax digital services
The roadmap published by HMRC lays out the agency’s plans to introduce dozens of information technology services and measures, including key projects such as:
- A new PAYE online service – For Pay As You Earn taxpayers to check or update their income, allowances, and tax reliefs via their personal account or the HMRC app.
- A new expenses service – Making it easier for employees to claim tax relief on allowable expenses by submitting claims and supporting evidence in one place.
- An expansion of self-employed services – Improving registration and streamlining the exit process for those who need to file self-assessment tax returns or stop filing.
A biometric voice system is already in place to verify the identities of taxpayers when they contact HMRC, which will be expanded through the rest of the tax year.
The aim is to reduce reliance on phone helplines, as there are still long waiting times and many calls go unanswered. HMRC is hoping for 90% of taxpayer interactions to be digital by 2030, either through the HMRC app or online personal tax accounts.
Plan for Corporation Tax changes
It can be difficult to plan ahead when even HMRC wasn’t sure about the future of digitalising Corporation Tax. However, the most important thing is to make sure you’re already using digital accounting software to streamline your accounts and tax returns.
This will put you in the best position to adapt to any new changes that HMRC might introduce in the next couple of years, so you can keep your business running smoothly.
If you own a business and need help managing taxes and reliefs, our accountants in Barnsley offer a variety of financial services for small and large companies.
To learn more about how we can help you with Corporation Tax management, call the gbac team on 01226 298 298 or send an email to info@gbac.co.uk.
We’ll get back to you promptly with more information about our adaptable solutions.