Call for evidence: Modernising Corporation Tax administration

The call for evidence focuses on the administration of Corporation Tax (CT). This means how companies meet their CT obligations in practice, including the processes they follow, the systems and software they use and how they interact with HMRC, directly or through a third party such as an agent.

• Reforming this requires a long-term view. As such, it does not propose any immediate changes to current obligations or specific rules. 
• Instead, it seeks views on how a more modern and joined-up system could make it easier for businesses to understand and meet their obligations with better use of information, reducing duplication and providing more proportionate approaches for companies with different needs and circumstances.
• The government is also interested in understanding the support companies may need to adapt to any future changes.
• It is separately exploring opportunities to simplify specific areas of the Corporation Tax system, through a separate consultation, ‘Corporate Tax Simplification for Business Investment’. 

The government believes the future administration of Corporation Tax should be underpinned by five principles that will focus on making the system clearer and easier for companies to navigate, while supporting them to get their tax right.

Principle 1: Helping companies get things right first time

This considers the 'foundations for compliance' which can affect a company’s ability to meet its tax obligations accurately and efficiently, and includes the:

• Transactions it carries out.
• Records it keeps.
• Systems it uses to manage financial information.
• Advice it receives. 

The government considers that a future system should:

• Place greater emphasis on preventing errors and uncertainty before they arise through clearer guidance, better embedded prompts, stronger links between records, accounts and tax and better integration of tax processes into existing finance and business systems.
• Recognise the important role played by agents, advisers and other intermediaries to help manage a company's tax affairs as well as effective collaboration with HMRC.  

Principle 2: A flexible IT platform

The government considers that a modernised Corporation Tax system should be supported by technology that is secure, resilient and able to grow alongside evolving business practices and technology while maintaining stability and trust for companies, agents and software providers.

The aim is to create a more seamless relationship between HMRC systems, commercial software and wider business processes through:

• Greater flexibility, from simpler interactions for some companies to more sophisticated integration with finance, accounting and tax systems for others. 
• A more adaptable system to allow businesses to interact with HMRC in ways that fit more naturally with how they already run their affairs, through the software and digital tools they already use. 

Principle 3: Better integrated information flows

The government recognises that the interaction of statutory accounts with company tax returns and computations, including the specific adjustments required by the tax rules, can introduce complexity and duplication. This is despite the tax return process being subject to a clear framework.

• The government is interested in a more connected and aligned approach to allow trusted information to flow more easily between business systems, tax software, agents, HMRC and other government bodies. 
• For example, are there opportunities for information to flow more effectively between HMRC and Companies House, to reduce the need to provide, reconcile or check similar information more than once?

Principle 4: Proportionate obligations for different entities

Since most companies are subject to broadly similar administrative requirements, despite their different circumstances and activities, there is a perception that current administrative obligations may be more extensive than necessary.

The government is keen to explore whether some entities might benefit from administrative requirements or processes that better reflect their circumstances, without undermining appropriate safeguards, oversight or public confidence, whilst ensuring that HMRC have the information needed to verify that tax obligations are being met.

This could, for example, mean:

• simpler routes through the system,
• reduced reporting requirements or
• alternative administrative processes.

Principle 5: Better use of data and more joined-up information

The government considers that a modern system should provide companies, agents and HMRC with a clearer view of CT obligations, payments, claims, repayments, correspondence and other interactions with HMRC.

• Information should be easier to access, understand and use. This will help companies manage their affairs with greater confidence, reduce administrative effort, and allow government to use trusted data to support compliance and customer service.
• Better use of third-party data should improve accuracy so information does not have to be requested, entered or verified multiple times. Ultimately, this could reduce the need for manual checks.

 The call for evidence questions are split into four sections:

• Enablers for delivering the vision, including technology, information flows, agents and advisers, and communication.
• Smaller companies and entities, split into incorporation, supporting compliance and reducing error, simplification and tailored approaches for small companies, and digital tools. 
• Other entities within the CT population such as charities, Community Amateur Sports Clubs (CASCs) and unincorporated associations.
• Larger companies and complex groups, considering complex structures and jurisdictions, AI and integrated business systems, and growth and organisation change.

The government will consider responses to the call for evidence to:

• Identify priority areas for reform.
• Inform the design of future policy options.
• Determine whether further consultation is required.

The consultation closes on 20 January 2027. Responses can be made by email to This email address is being protected from spambots. You need JavaScript enabled to view it. or online Here.

Useful guides on this topic

Calculating Corporation Tax & Checklist
How do you calculate Corporation Tax? What is the small profits rate? How do you calculate Marginal Tax relief? How do you adjust for Associated Companies? What is meant by Control? What are Augmented profits?

Tax adjustments to profits: Corporation Tax
What are the Tax adjustments that must be made to profits for Corporation Tax purposes?

External link

Call for evidence: Modernising the Administration of Corporation Tax 

Enablers for delivering the vision

Question 1: Taken together, do these principles provide the right long-term direction for the future administration of Corporation Tax? Are there any principles you particularly support, disagree with or think are missing?

Question 2: How well do you think this vision would work across the diverse Corporation Tax population, including small companies, larger companies, other entities, agents and software providers? Are there any groups whose circumstances or needs are not adequately reflected?

Question 3: Which of these principles should government prioritise? Which principles are likely to deliver the greatest benefits, or which would be the most difficult to deliver in practice? More broadly, what are your biggest priorities for simplifying Corporation Tax administration, and which changes would make the greatest difference to businesses?

Question 4: What technology, software or other tools do you currently use for different stages of the Corporation Tax journey, from record keeping and preparing accounts through to tax calculations and filing returns? To what extent are those tools already integrated?

Question 5: What opportunities are there for software, AI and data-driven services to further help companies meet their Corporation Tax obligations more accurately and efficiently, and what barriers or risks could limit their effectiveness?

Question 6: What risks, limitations or safeguards should government consider if greater use is made of software, automation or AI within HMRC?

Question 7: Where does the greatest administrative complexity or burden arise in meeting Corporation Tax obligations? How could processes be simplified and are there opportunities to better align accounting and tax filing processes?

Question 8: Is the information currently required by HMRC for Corporation Tax purposes appropriate? As information becomes more integrated and available, are there opportunities to simplify or better align requirements with other reporting requirements, such as Companies House, reduce duplication, make better use of information already held by government or collect information in different ways?

Question 9: What opportunities, risks or safeguards should government consider if information flows more seamlessly between accounting systems, tax software, agents, HMRC and other organisations? In particular, are there concerns around data quality, security, privacy and governance?

Question 10: As information becomes more integrated and available, will the existing Corporation Tax filing and payment timelines remain appropriate? What benefits, risks or trade-offs could arise from alternative approaches?

Question 11: What aspects of current Corporation Tax administration work well for agents and advisers, and where do the greatest challenges arise?

Question 12: What services, information or functionality would be most valuable to agents from a modernised Corporation Tax system, including when accessing information or acting on behalf of clients?

Question 13: How easy or difficult is it currently for companies and agents to access and understand their Corporation Tax information, obligations and interactions with HMRC? What are the main difficulties?

Question 14: What challenges do companies and agents experience when they require a response or decision from HMRC as part of managing their Corporation Tax affairs, including in relation to claims or repayments? What changes could improve these processes?

Question 15: What information, services or functionality would be most valuable if companies and agents could access their Corporation Tax affairs through a more joined-up and secure service?

Question 16: What opportunities, risks or lessons from the UK or other countries should government consider when developing future Corporation Tax services, including approaches to digital identity, access to information and secure interactions with government?

Question 17: What administrative challenges arise as companies grow or invest? At which points in the business lifecycle do they occur, and what support would be most valuable? Where possible, please provide examples of where Corporation Tax administration has delayed or discouraged investment, and which changes could have the greatest benefit.

Question 18: What risks, costs or unintended consequences should government consider if different administrative approaches were to apply to different parts of the Corporation Tax population? In particular, are there any thresholds, reporting requirements or changes in obligations that could create cliff edges, distortions or disincentives to growth?

Smaller companies and entities

Question 19: To what extent do differences in tax treatment, reporting requirements and administrative obligations influence decisions to incorporate? Are there aspects of the current tax system and administrative framework that encourage or discourage incorporation?

Question 20: What information, support or guidance would help companies make more informed decisions about whether to incorporate?

Question 21: What challenges, if any, arise from the period between incorporation and a company’s first Corporation Tax obligations?

Question 22: What changes to Corporation Tax administration could help newly incorporated companies better understand their obligations, reduce errors and engage more effectively with the tax system from the outset?

Question 26: How do small companies currently maintain records and the information needed for Corporation Tax purposes? What is the role of accounting software and digital record-keeping tools? What approaches work well, and what challenges do companies face?

Question 27: What role could software, automation, artificial intelligence or services such as a digital business tax assistant play in supporting Corporation Tax administration for small companies? What safeguards should be considered to ensure accuracy, transparency and confidence in the outputs they produce?

Question 28: What factors most influence decisions about whether to adopt accounting software, digital record-keeping tools, automation or AI-enabled services? What opportunities, risks or concerns do companies associate with these technologies, and what role, if any, could government play in supporting their use?

Question 29: What role could business bank accounts play in supporting record-keeping and improving compliance?

Question 30: Are there opportunities to introduce tailored approaches to Corporation Tax administration for certain small companies? If so, what aspects of administration could be tailored, and what benefits or risks might arise? How could eligibility be determined without creating unfairness, complexity or barriers to growth (such as turnover, activity, balance sheet, number of employees)?

Question 31: What lessons, if any, can be learned from international approaches to simplified taxation and reporting for micro and small businesses? Are there features of these approaches that could improve compliance, reduce administration or support growth in the UK?

Other entities within the CT population

Question 32: For charities, CASCs, public bodies and other entities with specialist tax treatment, what Corporation Tax administrative requirements are most onerous? Are there opportunities to reduce duplication with other reporting requirements or improve guidance and support?

Large companies and groups

Question 33: What are the most significant Corporation Tax administration challenges faced by large companies and complex groups? Which of these challenges arise because of the scale, complexity, structure or international nature of their operations?

Question 34: Are there opportunities to reduce administration for large companies and complex groups by improving how Corporation Tax requirements interact with other reporting obligations, business systems and sources of information? If so, what changes would deliver the greatest benefits?

Question 35: Are there examples of approaches used in other jurisdictions that help large companies manage Corporation Tax or wider business reporting requirements more effectively? What lessons could be applied in the UK?

Question 36: How are large companies currently using software, automation, AI and integrated business systems in relation to Corporation Tax administration? What approaches work well, what challenges do organisations face, and what barriers prevent wider adoption or use of these technologies?

Question 37: What barriers prevent greater use of integrated systems, automation or artificial intelligence, and how could these barriers be addressed?

Question 38: How could future Corporation Tax administration better align with the finance, accounting, tax, and governance systems already used by large companies? What opportunities or challenges should government consider?

Question 39: What lessons can government learn from the use of software, automation, AI and integrated business systems within large companies, and what safeguards, controls or support may be needed to enable their effective use in Corporation Tax administration?

Question 40: What administrative challenges arise during major organisational, systems or business transformation programmes, such as acquisitions, restructurings, finance transformation or enterprise system implementation?

Question 41: What support, services or changes to Corporation Tax administration would help companies navigate these transition points more effectively?

Question 23: What are the main challenges small companies face in meeting their Corporation Tax obligations? Where in the business lifecycle do they arise and which aspects of Corporation Tax most commonly lead to errors or inaccuracies?

Question 24: Which aspects of reporting income, treatment of expenses, calculating taxable profits and maintaining a separation between business and personal finances are difficult to understand or apply in practice? What would make these processes easier to get right?

Question 25: How could Corporation Tax administration guidance and support, be improved to help small companies meet their obligations more accurately and efficiently?