Does Making Tax Digital Apply to Limited Companies? 

Making Tax Digital has been live since April, and a lot of the coverage makes it sound like every business needs to act on it.

It’s not always true.

For now, it only applies to sole traders and landlords. Specifically, anyone whose business or rental income crossed £50,000 before expenses, based on what they reported for the 2024 to 2025 tax year. If that's not you, the number matters less, but if you've got rental or freelance income sitting alongside the company, don't get too comfortable with it.

It’s expected to drop to £30,000 next April, then £20,000 the April after that.

The mechanics change too - you keep digital records and send a summary update every three months through approved software, then file a tax return at the end of the year that does the job the old annual return used to do.

A limited company sits outside that completely.

Limited companies don't file Income Tax Self Assessment. They still file a Corporation Tax return (the CT600) once a year.

HMRC did look at building a digital version of Corporation Tax to run alongside the Income Tax rollout, but set the idea aside in its July 2025 Transformation Roadmap, with no replacement start date announced.

The reasoning was fairly practical: the companies paying Corporation Tax range from one-person consultancies to multinational groups, and a single digital format never sat comfortably across that range.

One part of Making Tax Digital does already reach your company though. Businesses above the VAT threshold have to keep digital VAT records and file through compatible software.

Since 2022, that rule covers every VAT-registered business, including smaller ones that registered voluntarily well under the threshold.

So if your company is VAT-registered, this part of Making Tax Digital already applies, whatever your turnover looks like. In practice, that means a recognised accounting package, or a spreadsheet linked to HMRC's systems through bridging software.

The Income Tax version launching in 2026 is a separate regime aimed at individuals, and it leaves your VAT position exactly where it was.

So where does this reach you?

Salary and dividends drawn from your own company stay outside qualifying income entirely, so paying yourself the way you always have keeps you clear of MTD for Income Tax.

A rental property held in your own name is different and so is freelance or consultancy work you take on outside the company. The exemptions that exist are personal, covering things like digital exclusion or being under a power of attorney because you can't manage your own financial affairs - they're narrow, and most directors won't come near any of them.

Take a director who owns a buy-to-let earning £22,000 a year in rent before expenses, alongside a consultancy sideline bringing in £30,000 more in their own name. That's £52,000 combined.

In that case, MTD for Income Tax reaches them personally this year, even though their company's turnover might be ten times that size and its Corporation Tax return hasn't changed one bit.

HMRC reviews Self Assessment returns each year and writes to anyone whose qualifying income crosses the threshold, but it's worth checking for yourself if any of this sounds close to your situation.

From September 2026, HMRC started automatically signing up sole traders and landlords who've crossed the threshold but haven't registered themselves, and the size of the company has no bearing on this. What decides it is the income sitting in your own name.

It’s important to keep personal and company money visibly separate, since that's the detail HMRC's Income Tax version cares about, and the detail that gets messy first.

That line between company money and personal money is where the confusion starts, especially once a director's salary, a bit of freelance income, and the day-to-day business spending all move through variations of the same account.

Running the company through its own Ampere business account keeps that separation clean. Salary and dividends flow out through one channel, and company spending stays on the corporate card. What counts toward your personal £50,000 threshold stops being a guessing exercise every January.

Corporation Tax modernisation is still coming, just not in the shape HMRC originally planned.

The roadmap promises a different digital approach for companies somewhere down the line, without a date attached yet. For now, if you're running a UK limited company, this year's Making Tax Digital news is a story about Self Assessment, not about your Corporation Tax return.

Keep doing what you were already doing, and you've done everything this year's Making Tax Digital rollout asks of a limited company.