February 01, 2021
On 12 November 2020, HMRC launched a consultation document to analyse how the systems placed for Making Tax Digital (MTD) and already publicly in use for VAT could be implemented for Corporation Tax (CT). Many fundamental changes are being sought by HMRC so corporates must engage in the consultation either directly or through interested parties such as FTI Consulting.
Companies need to maintain their records digitally and submit quarterly updates as well as year-end tax return using MTD compatible software.
All the VAT-registered businesses with a taxable turnover above the VAT threshold is currently encompassed by the Making Tax Digital (MTD) regime which is launched in 2018 and from April 2022, it will be extended to all VAT-registered businesses below the threshold.
For those who receive income from self-employment and/or property, MTD will be mandated for income tax for them from April 2023 and to cover the corporation tax, it is proposed that the regime will be expanded further. The companies will be able to participate in a voluntary pilot in 2024 as suggested by the current timelines.
Important Points to Remember About MTD for CT:
A long-awaited consultation on MTD for Corporation Tax was launched in November and over the next two months, HMRC is hosting online meetings with groups of stakeholders to gather feedback on the proposals.
In November, consultation on MTD for Corporation Tax was launched and HMRC hosting an online meeting with stakeholders to collect their feedback on the proposals.
Key Points for Businesses to Know About MTD for CT:
The new ways will be adopted for working in spreadsheets, financial systems and tax products and all the data must be digitally linked that goes into the tax calculation and return.
The tax faculty is keen to provide feedback from members and throughout the development of MTD for corporation tax, will be actively engaging with HMRC. For any query feel free to contact us on Dhruv@doshioutsourcing.com