Earlier this year, the Government published a timetable for taking the Making Tax Digital (MTD) programme forward.

As part of that programme, MTD will be extended to corporation tax. Although, this will not be mandatory until at least 2026, HMRC are now consulting on the design. Businesses will be given the chance to take part in a pilot prior to its introduction. This is currently planned for 2024.

Current system

Under the current system, you must file your accounts at Companies House within nine months of the end of your accounting period. Your corporation tax is due nine months and one day from the end of your accounting period, and you must file a company tax return with HMRC no later than 12 months from the end of your accounting period.

What MTD for corporation tax may look like

The purpose of the consultation is to consult on the design for MTD for corporation tax – therefore it is not yet set in stone. However, it is envisaged that your company will need to use approved software to maintain digital business records (which include XBRL tagging). You will then use your digital records to upload quarterly updates to HMRC. As part of this process, you will be able to see your expected corporation tax liability for the period. After the end of the year and before your accounts are submitted to Companies House, we will be able to use MTD-compatible software to make any adjustments that are needed and finalise your company’s MTD process.

Keep up to date

MTD is an evolving process. Speak to us on 0114 213 4731 or hello@velocityas.co.uk to ensure that you keep abreast of the changes.