Making Tax Digital for Corporation Tax: What Arab Directors Need to Prepare For

Making Tax Digital (MTD) is HMRC's programme to shift UK tax record-keeping and filing to fully digital systems. MTD for VAT has been mandatory since April 2022 for all VAT-registered businesses. MTD for Income Tax Self Assessment starts in April 2026 for sole traders and landlords. MTD for Corporation Tax is the next phase — but its mandatory start date has been pushed back several times and HMRC has confirmed that the earliest it will be mandated is April 2026 for a pilot group, with full mandation expected after 2027.

What MTD for CT will require when mandated. First, digital record-keeping: all income and expenditure records maintained digitally using HMRC-recognised software (Xero, QuickBooks, Sage, and most modern accountancy platforms are expected to qualify). Second, quarterly updates: four quarterly submissions to HMRC per accounting year summarising income and expenses, in addition to the final annual CT600 return. Third, end-of-period statement: confirming the figures for the year and triggering the final tax calculation.

What MTD for CT does not change. The annual accounts preparation process remains the same — statutory accounts are still prepared, directors still approve them, they are still filed at Companies House. The CT600 and CT payment deadlines remain unchanged. The change is primarily about the frequency and format of reporting to HMRC mid-year, not about the legal obligation to file annual accounts.

What Arab directors should do now. If your UK company uses cash-based bookkeeping (manually entered spreadsheets or paper records), now is the time to move to cloud-based accounting software — Xero, QuickBooks, or similar. This is good practice regardless of MTD, and your accountant can typically connect their own software to your records for more efficient year-end preparation. Fileminder clients who use Xero connected to their UK business bank account are already effectively MTD-ready for when Corporation Tax mandation arrives.

The concern for non-resident directors. Quarterly updates to HMRC require records to be kept in real time, not assembled at year-end. For a Gulf-based director who currently hands over a bundle of invoices and bank statements once a year, MTD for CT will require a change in practice — the bookkeeping will need to be kept current throughout the year. Cloud accounting connected to your UK bank account (Wise, Revolut Business) handles this automatically for most transactions.