HMRC have published a summary of the responses to the Consultation: Making Tax Digital for Corporation Tax, which closed in March.

The Consultation: Making Tax Digital for Corporation Tax  sought to understand the transitional and ongoing costs of the Making Tax Digital (MTD) rollout along with the perceived benefits for companies.

142 written responses were received and a further 65 responses were provided via the shortened online version of the consultation, specifically for smaller businesses. Responses also came via 10 virtual events and a public webinar.

In general the responses were:

  • Broadly supportive of the proposals, although some felt it would not deliver the improvements or benefits required to make it a viable option.
  • In light of the existing rollouts for VAT and Income Tax respondents asked for early clarity and flexibility.
  • Whilst most believed that MTD for Corporation Tax (MTD for CT) should apply to all, some exemptions should be considered:
    • A complete exemption for dormant companies and charities.
    • A quarterly reporting exemption only.
    • A more tailored approach for more unique entities such as permanent establishments or Lloyd's members.
    • A few thought a threshold would be appropriate.
  • There was a clear need for group reporting to be considered using a mixed approach. Some groups preferred entity level reporting and updates, but others valued the option of reporting at a group level.
  • On the whole it was agreed that large companies, especially those within the Quarterly Instalment Payment scheme, already meet many of the MTD principles and as such, should be excluded from the quarterly update requirement.
  • There was an overwhelming rejection of any proposals to align the filing dates for tax and company law purposes, as was the suggestion to withdraw the free online filing product (CATO).

In response, the government recognised:

  • That a "one size fits all" approach would not work and that flexibility would be needed.
  • Clarity was required around the processes and the terminology where necessary.
  • There would also be tailoring required for certain types of companies.
  • Despite this, the underlying principle of bringing all companies within the charge to Corporation Tax within the MTD for CT system, would remain. 

Useful guides on this topic:

Consultation: Making Tax Digital for Corporation Tax
HM Treasury have opened a new consultation 'Making Tax Digital for Corporation Tax' inviting views on how the principles of Making Tax Digital (MTD) could be implemented for Corporation Tax.

Companies: Filing & payment deadlines
What are the filing and payment deadlines for companies? What penalties apply?

External link:

Consultation outcome: Making Tax Digital for Corporation Tax

 

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