Making Tax Digital for Corporation tax by 2026
HMRC is consulting on how the principles established for Making Tax Digital for quarterly online filing could be implemented for Corporation tax.
Under its ten year tax administration strategy HMRC said it would consult with stakeholders on Making Tax Digital for corporation tax during autumn 2020, and is now seeking feedback to inform the early-stage design and get a better understanding of the transitional and ongoing costs and benefits for companies of different sizes.
Nearly three million businesses and other taxpayers are within the charge to corporation tax, of which around half incur a corporation tax liability every year.
If the principles and design proposed in this consultation are adopted, they would need to maintain their records of income and expenditure digitally; use Making Tax Digital compatible software to provide quarterly summary updates, and provide an annual corporation tax return using their Making Tax Digital compatible software.
The proposed date to commence a voluntary pilot for Making Tax Digital for corporation tax is April 2024 becoming mandatory from 2026 at the earliest.
Can HMRC come after you personally for IR35 tax?
A recent decision by the First-tier Tribunal, involving a company set up by the BBC presenter Christa Ackroyd, has received a lot of press. Although this case relates to periods prior to the new rules which took effect in April 2017 and so isn’t a test of their effectiveness, the First-tier Tribunal’s decision raises an important question about where the liability for IR35 tax lies.