Making Tax Digital for Corporation Tax (MTD for CT) was planned as the next major step in HMRC’s drive to modernise tax reporting for UK businesses.
However, the government has now confirmed that MTD for Corporation Tax will not be introduced. This means limited companies can continue filing Corporation Tax returns using the existing HMRC online service, without the need for MTD-compatible software.
While this change removes one expected compliance burden, digital record-keeping still offers big advantages. By keeping accurate electronic records and using accounting software, your company can reduce errors, improve efficiency, and stay ready for any future updates to HMRC systems.
This guide explains:
Making Tax Digital for Corporation Tax (MTD for CT) was HMRC’s proposed plan to modernise how incorporated businesses, mainly limited companies, managed their tax records and submissions.
If introduced, MTD for Corporation Tax would have required companies to:
The aim was to make Corporation Tax reporting more accurate, efficient, and transparent by cutting down on errors, removing manual processes, and giving HMRC a clearer view of company tax positions in real time.
However, the UK government has confirmed that MTD for Corporation Tax will not be implemented. Businesses should continue filing Corporation Tax returns using the existing CT600 system via HMRC’s online services.
For more details on how Corporation Tax works now, see GOV.UK: Corporation Tax.
Making Tax Digital for Corporation Tax (MTD for CT) was originally in development, with HMRC running consultations and a pilot scheme. However, the government has now confirmed that MTD for Corporation Tax will not be introduced.
Here’s a quick look at the key milestones that led to this decision:
| Year | Status |
| 2021 | HMRC completed its consultation on the MTD for CT framework |
| 2024 | Pilot scheme ran with voluntary companies testing MTD-compatible processes |
| 2025 | Government confirmed it would not move forward with MTD for Corporation Tax |
Key point: Limited companies will continue to file Corporation Tax returns using the current CT600 system via HMRC’s online services. While MTD for CT is no longer happening, adopting digital record-keeping and accounting software can still help streamline compliance and improve accuracy.
For the latest updates, check GOV.UK: Making Tax Digital.
Making Tax Digital for Corporation Tax (MTD for CT) was originally expected to apply to all UK companies that pay Corporation Tax. This would have included:
HMRC had also suggested that companies with annual profits below £50,000 might face lighter digital reporting requirements, though these were never finalised.
Key point: Since the government has decided not to proceed with MTD for Corporation Tax, these changes will not come into effect. Companies should continue filing Corporation Tax using the existing CT600 process.
For current Corporation Tax rules, see GOV.UK: Corporation Tax.
Since the government has decided not to move forward with Making Tax Digital for Corporation Tax (MTD for CT), companies will not face new digital record-keeping or filing requirements for Corporation Tax. The current process using HMRC’s online services to complete and submit the CT600 return remains in place.
That said, many businesses are already choosing to go digital because of the clear benefits. Using accounting software can help you:
Key point: While MTD for Corporation Tax won’t become mandatory, adopting digital tools now can still improve accuracy, efficiency, and compliance for your company.
Since the government has confirmed that Making Tax Digital for Corporation Tax (MTD for CT) will not be introduced, there is no requirement for companies to use MTD-compatible software when filing Corporation Tax returns. Businesses can continue using HMRC’s online services to complete and submit the CT600 return.
That said, using accounting software still offers clear advantages for companies:
Popular providers such as Xero, QuickBooks, Sage, and The Balance App already support HMRC online submissions and help businesses maintain accurate records. Even without MTD for CT, adopting cloud software can make your company’s tax process faster, simpler, and less error-prone.
Tip: If you’re already using cloud accounting, you’re well positioned to keep your tax reporting efficient and ready for any future HMRC digital changes.
For updates on which tools are approved, see our MTD Compliant Software page.
As with other parts of Making Tax Digital, the government had planned certain exemptions for MTD for Corporation Tax. These would have applied to companies that could demonstrate:
However, since the government has confirmed that MTD for Corporation Tax will not be introduced, companies no longer need to apply for exemptions.
Key point: While exemptions are no longer relevant, businesses should still consider adopting digital accounting practices voluntarily. Doing so can save time, reduce errors, and future-proof your tax reporting against any new HMRC initiatives.
For current Corporation Tax rules, see GOV.UK: Corporation Tax.
Since the government has confirmed that MTD for Corporation Tax will not become mandatory, businesses don’t need to worry about new compliance requirements or penalties linked to MTD for CT. The existing process for filing Corporation Tax returns through HMRC’s online service remains in place.
That said, there are still risks if your company continues to rely heavily on manual spreadsheets or outdated systems:
Key point: Even though MTD for CT has been scrapped, preparing your business with digital record-keeping and accounting software is still the smart move. It reduces errors, saves time, and ensures you’re ready for any future updates to HMRC systems.
At Accounting Wise, we’re already helping UK companies modernise their tax systems and adopt smarter digital processes even though Making Tax Digital for Corporation Tax will no longer be introduced.
Our digital accounting support includes:
While MTD for Corporation Tax has been dropped, HMRC continues to move towards digital-first systems (such as MTD for VAT). Getting your business onto efficient, digital processes now means you’ll be ready for future changes, while enjoying greater accuracy and less admin today.
Speak to our team today and modernise your accounting with trusted support from Accounting Wise.
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No. The UK government has confirmed that MTD for Corporation Tax will not be going ahead. While consultations and pilot schemes were carried out, the rollout has now been cancelled. Companies will continue to file their Corporation Tax returns using the existing CT600 process via HMRC’s online services.
Why was MTD for Corporation Tax cancelled?
The government reviewed the costs and administrative burdens of implementing MTD for Corporation Tax and decided not to proceed. Feedback from businesses suggested that the additional compliance requirements could outweigh the benefits. Instead, HMRC is focusing on improving existing digital services and maintaining the systems already in place.
How do I currently file Corporation Tax?
Corporation Tax is reported through the CT600 form, which can be submitted online via HMRC’s Corporation Tax service or through approved third-party accounting software. You must also prepare statutory accounts and tax computations as part of the filing process. Filing deadlines are usually 12 months after the end of your company’s accounting period, with payment due within 9 months and 1 day.
Do I still need digital accounting software if MTD for Corporation Tax is scrapped?
While there’s no legal requirement to use digital software for Corporation Tax, it’s strongly recommended. Software such as Xero, QuickBooks, Sage, or The Balance App helps businesses keep accurate digital records, automate tax calculations, integrate with bank feeds, and reduce errors. Even without MTD for CT, using cloud accounting can save time and money while improving compliance.
What digital reporting does HMRC still require?
MTD for VAT is already mandatory for most VAT-registered businesses. Self-Assessment for landlords and the self-employed is due to join MTD in April 2026 (for those with income over £50,000). While Corporation Tax is excluded, HMRC’s broader strategy remains digital-first, meaning more processes will likely move online in the future.
What risks do I face if I stick with spreadsheets and manual records?
Manual spreadsheets may work in the short term, but they come with risks:
Moving to a cloud accounting solution reduces these risks and supports better decision-making.
What does this decision mean for small companies?
For small companies, the cancellation of MTD for CT removes a potential compliance burden. You can continue using HMRC’s current system for filing CT600 returns. However, small companies often benefit most from switching to cloud accounting, as it makes bookkeeping and reporting faster, more affordable, and easier to manage without a large finance team.
Will HMRC revisit MTD for Corporation Tax in the future?
There’s no confirmed plan for HMRC to reintroduce MTD for Corporation Tax, but HMRC is committed to expanding digital services across tax administration. It’s possible that digital changes may return in a different form later. Businesses that adopt cloud accounting now will be better prepared if future updates are announced.
How can digital accounting help with Corporation Tax if MTD isn’t required?
Digital accounting software helps you:
Even without MTD requirements, these tools improve compliance and give you better financial control.
How can Accounting Wise help with Corporation Tax?
At Accounting Wise, we provide full Corporation Tax support, including preparing your CT600, ensuring your accounts and computations are correct, and submitting returns to HMRC on time. We also help businesses transition to cloud accounting systems, giving you more efficiency and accuracy in your financial management. With our expert team, you can reduce admin stress and focus on running your company.
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