HMRC presses on with roll-out of Making Tax Digital for Income Tax (MTD IT), but has changed plans for Corporation Tax.
MTD IT is now approaching implementation, with updated draft legislation published over the summer. HMRC also released a Transformation Roadmap, highlighting that digital self-service is the future. According to the document:
“HMRC will look very different by 2030. Almost all our straightforward customer queries will be handled digitally or automatically, with at least 90% of customer interactions being digital.”
New rules for sole traders and landlords
MTD IT requires income and expenses to be reported to HMRC online using specific software, on a quarterly basis. The rollout will be phased, based on qualifying income:
- From 6 April 2026: income over £50,000 for 2024/25
- From 6 April 2027: income over £30,000 for 2025/26
- From 6 April 2028: income over £20,000 for 2026/27
Other taxpayers
HMRC has indicated it will continue to explore ways to bring the benefits of digitalisation to sole traders and landlords with income below £20,000. This suggests possible future updates for those currently below the threshold.
MTD and Corporation Tax
Surprisingly, plans to introduce MTD for Corporation Tax have been abandoned. However, this does not mean no changes will occur. HMRC’s Transformation Roadmap indicates ongoing modernization, including:
- Renewal of internal systems for Corporation Tax to support future improvements
- Developing a new approach suited to the diverse Corporation Tax population
- Consulting with stakeholders to ensure the best outcomes and provide early clarity
HMRC acknowledges that the Corporation Tax population includes a wide range of entities, from small businesses to multinationals, charities, property management companies, and unincorporated associations.
Helping with digital compliance
Digital compliance will bring challenges for taxpayers. We are on hand to advise on the best way forward for you and your business. Please contact us with any queries you may have.
