Making Tax Digital (MTD) Coming For Corporation Tax
HM Treasury has opened a consultation on ‘Making Tax Digital for Corporation Tax‘ inviting views on how the principles of Making Tax Digital (MTD) could be implemented for Corporation Tax this will be for the entities within the charge to Corporation Tax.
For business it would mean higher compliance cost but at the same time businesses will have real-time information available to them.
The regime MTD already started in April 2019 for VAT purposes only. MTD for Income Tax is expected to be introduced from 6 April 2023.
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The consultation provides some additional information on the planned rollout of MTD for Corporation Tax. Following the end of the consultation, the government will continue to refine the MTD for Corporation Tax requirements by working collaboratively with stakeholders and will then provide entities with an opportunity to take part in a pilot.
This was based on the success of testing the MTD for VAT service and allowed HMRC to identify issues based on real people’s experiences of the service. HMRC initially introduced a limited, small-scale pilot for MTD for Income Tax, before building in additional functionality and scaling up the numbers of eligible participants and expects to follow a similar pattern for Making Tax Digital for Corporation Tax.
The pilot will present HMRC with opportunities to check the proposed design of the system and learn lessons. The consultation states that the proposed date to commence the voluntary pilot for MTD for Corporation Tax is April 2024, with mandation to follow from 2026 at the earliest.
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