Making tax digital for corporation tax scrapped

The HM Revenue & Customs Transformation Roadmap was released on 21 July and it was announced that they do not intend to introduce Making Tax Digital for Corporation Tax. 

Instead HMRC will develop an approach to the future administration of Corporation Tax that is suited to the varying needs of the diverse Corporation Tax population. HMRC say they recognise the wide range of entities, from small owner managed businesses to large multinational enterprises. 

HMRC have said they will work closely with stakeholders and government to identify changes that will provide the best outcome for taxpayers and the government. They are committed to consulting and providing early clarity and assurance on both the design and timing of any changes. 

While confirmation Making Tax Digital for Corporation Tax will not be introduced is welcomed, we await to see the changes mentioned and what they will mean for you and the day to day running of your business. 

There are some changes proposed which will change interaction with HMRC that are either confirmed or being consulted on. 

From 6 April 2027 most benefit in kind and expenses, along with associated income tax and National Insurance Contributions, will need to be reported through real time Information (RTI) on the company payroll. 

For a temporary period, employment related loans and accommodation benefit reporting will not be mandatory and can still be reported on a P11d at the end of the tax year. A timeline for mandatory payrolling these benefits will be set out in due course. 

This will lead to the eventual end of the annual P11d benefit in kind forms. 

In the Budget last October, it was confirmed there would be a consultation on E-Invoicing. The consultation closed on 7 May 2025 and we await the outcome. We may hear more information at the next budget in the autumn. 

E-Invoicing is the digital exchange of invoice information directly between buyers’ and suppliers’ financial systems, even if these systems are different. The outcome is an invoice which is automatically written into the buyer’s financial system without manual processing. 

The consultation provided several approaches. Currently E-Invoicing is not mandatory in the UK, with the exception of services provided to the NHS. Other countries have made E-Invoicing mandatory in varying degrees.

Any outcome is likely to affect anyone who is currently manually generating invoices and anyone either emailing or posting invoice to customers. 

We will await any further announcements on further changes to how we all interact with HMRC and we will keep you updated when these announcements are made. We are likely to get further updates in the Autumn Budget in November. 

If you have any questions, please get in touch with your usual contact here at Albert Goodman.