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HMRC opens consultation on Making Tax Digital for Corporation Tax

HMRC office

HMRC has opened a consultation period for feedback on its plan to roll-out its Making Tax Digital (MTD) platform for corporation tax by April 2026.

Open until March 5, the consultation is asking for views on the change, which also looks set to include the introduction of the obligatory submission of a quarterly summary of a business’s tax position through dedicated software.

HMRC has also questioned whether the due date for filing corporation tax returns should be aligned with company accounting filing deadlines – nine months after the year-end instead of 12 months – as part of the new regime.

The HMRC's Making Tax Digital (MTD) platform for VAT was introduced in April 2019 and car retailers should expect to adapt quickly to a more efficient, online model in the same vein.

However, ASE Global’s head of tax, Chris Cummings, suggested that quarterly reporting could prove a point of concern for some.

Commenting on the HMRC’s consultation paper on Making Tax Digital for Corporation Tax – published last week – Cummings said: “Technology makes administrative matters much more orderly and precise and therefore these proposals make considerable sense without imposing too much of a burden upon the taxpayer companies.

“The only concern to be aware of is that once quarterly summaries / updates become embedded into a well-oiled system of tax compliance, the easy and next step will be to advance payment of tax within the quarterly regime as applies to large companies under the QIP’s regime.

“We can understand the need to make VAT and PAYE subject to real time processes; in the former, the tax belongs to HMRC with the taxpayer company merely an agent collector and in the latter the tax is money withheld from employees where the company has a duty to pass on the employee’s payment.

“Corporation Tax is a tax on profits and so whilst MTD will simplify the data collection and compliance duty, it is to be hoped that tax payments will not be accelerated for small and medium sized enterprises as the very essence of their business, cash management, will be significantly altered.”

AEE said that companies who are already within the quarterly corporation tax regime (QIP’s) would be exempt from the quarterly corporation tax updates/summaries, as they already make quarterly payments.

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