HMRC Scraps Making Tax Digital for Corporation Tax

HMRC has confirmed in the latest HMRC Transformation Roadmap, published on 21 July 2025, that it has scrapped the proposed plans for Making Tax Digital (MTD) for Corporation Tax (CT).  Despite this, HMRC have said it is “developing an approach to the future administration of CT that is suited to the varying needs of the diverse CT population”. 

Companies will now no longer be required to use mandatory digital record-keeping and complete quarterly reporting under MTD.  The focus remains on the rollout of MTD for Income Tax (MTD ITSA), due to begin in April 2026 for self-employed individuals and landlords earning over £50,000. The impact of this new regime is likely to influence how HMRC approaches future initiatives for the corporation tax system.

The decision raises questions about the future direction of CT compliance. With recent data showing that the corporation tax gap has more than doubled to 15.8% in 2023/24 (HMRC statistics), HMRC has indicated that it will continue to modernise CT through other digital means, including targeted nudges and the better use of third-party data, to promote compliance.

While MTD for CT is no longer on the agenda, it’s clear that HMRC still intends to drive digital transformation within the corporation tax system. What this new framework will look like remains to be seen, but companies can expect further developments in the coming years.