Making Tax Digital for Corporation Tax (MTD for CT)

Key Details – January 2021

HMRC launched the MTD for CT consultation document on 12 November with the window for responses open until 5 March 2021. HMRC’s consultation document is available here.

There are a number of fundamental changes being sought by HMRC so it is vital that corporates engage in the consultation either directly or through interested parties such as FTI Consulting. Some of the key features of the scheme are highlighted below.

Key Points

End to end digital record-keeping and digital links will become mandatory for all companies, including non-resident companies;
Quarterly filing of summary tax-categorised information will be required from all CT taxpayers, though some potential exemptions may apply for quarterly instalment payers;
The potential alignment of CT deadlines to Companies House filings could shorten the CT filing period to 9 months or 6 months;
iXBRL tagging will be integral to MTD and manual tagging will therefore no longer be supported; and
HMRC expects some of its £2.1bn CT tax gap to be reduced by these measures.

Your in-house tax compliance process will have to change

Earlier deadlines and with no lead-time over the statutory accounts deadline. The tax return filing deadline may now be aligned with the statutory accounts filing deadlines, therefore 6 months for Plcs and 9 months for all other companies, meaning there will no longer be a time lag between the completion of the statutory accounts and corporation tax return.
Typing, re-keying and manual edits will no longer be allowed.
New ways of working in spreadsheets, tax products, and financial systems will have to be adopted.