MTD for limited companies, as a direct HMRC scheme, does not exist — but that doesn’t mean directors are off the hook entirely. Some are personally in scope for Making Tax Digital from April 2026, depending on what income they receive outside the company. The distinction between company obligations and personal ones is where most directors get confused. This guide separates them.
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What Changed
Two changes hit UK limited companies in early 2026. They are separate, they carry different obligations, and conflating them is the most common mistake directors are currently making.
The first is straightforward. The joint HMRC and Companies House online filing portal closed on 31 March 2026. From 1 April 2026, every UK limited company filing a Company Tax Return (CT600) and annual accounts must use commercial software. No exceptions for size, turnover, or VAT status. This is not MTD — it is a filing method change — but the practical outcome is the same: the free government gateway route for Corporation Tax is gone.
The second change is MTD for Income Tax Self Assessment (MTD ITSA), which became mandatory from 6 April 2026 for individuals with qualifying income above £50,000. Personal obligation. Not a company obligation. The question is whether your income structure as a director puts you in scope.
Who Is Affected
The company position: MTD for limited companies covering Corporation Tax does not exist. HMRC’s 2025 Transformation Roadmap confirmed that MTD for Corporation Tax is cancelled. No quarterly CT updates, no MTD-specific software requirement under the MTD banner for Corporation Tax. The CT600 change above is a Companies House and HMRC filing requirement — entirely separate from the MTD programme.
The director’s personal position: This is where it gets specific. MTD for limited companies may not apply to the business itself, but individual directors can still be personally in scope for MTD ITSA depending on their income outside the company.
Director salary through PAYE: not qualifying income. Dividends from the company: also not qualifying income — they’re treated as investment income. Neither counts toward the MTD ITSA threshold.
What does count: rental income from personally held property, income from a sole trade run alongside the company, or other self-employment income. A director whose qualifying income from these sources exceeds £50,000 is personally required to comply with MTD ITSA from 6 April 2026 (GOV.UK).
Two examples that cover most director situations:
Director A — salary of £50,000, dividends of £80,000. No rental income, no sole trade outside the company. MTD ITSA does not apply. Self Assessment continues as before with no quarterly digital reporting required.
Director B — salary of £12,570, dividends of £40,000, plus £55,000 in rental income from a buy-to-let held personally. The rental income alone clears the £50,000 threshold. MTD ITSA applies from 6 April 2026. Quarterly digital updates to HMRC, MTD-compatible software required.
Where a director also runs a sole trade alongside the company, qualifying income from both streams is combined when testing the threshold. If you’re not sure which category you fall into, an accountant can confirm based on your actual figures. For how the rules apply to those operating entirely as sole traders, our MTD for sole traders UK 2026 guide covers the position in detail.
What You Need to Do
For the company — CT600 filing from 1 April 2026:
MTD for limited companies aside, every director needs to confirm that Corporation Tax filing is now running through commercial software. If your accountant handles CT600 submissions, they almost certainly already use practice software that supports this — but it’s worth a quick confirmation. If you file independently and have been using the HMRC/Companies House joint portal, that route is closed. You need HMRC-recognised software that supports CT600 returns and iXBRL-tagged accounts. Move to it now — don’t wait for a filing deadline to find the portal gone.
Payment deadlines and filing deadlines for Corporation Tax are unchanged. Nine months and one day after your accounting period ends for payment; twelve months for the return. The method changed. The calendar didn’t.
For directors personally — if MTD ITSA applies:
Register with HMRC for MTD ITSA, select MTD-compatible software, and begin keeping digital records of qualifying income sources. Quarterly updates run to 5 July, 5 October, 5 January, and 5 April each year — with a final declaration after the tax year closes. The software handles the submission mechanics. The obligation is to maintain digital records and connect them to the process consistently.
Deadlines and Key Dates
| Date | What Happens |
|---|---|
| 1 April 2026 | CT600 and accounts: commercial software mandatory for all UK limited companies (GOV.UK) |
| 6 April 2026 | MTD ITSA: mandatory for qualifying income above £50,000 (GOV.UK) |
| 6 April 2027 | MTD ITSA threshold drops to £30,000 qualifying income |
| 6 April 2028 | MTD ITSA threshold drops to £20,000 qualifying income |
The 2027 and 2028 thresholds matter now, not later. Directors with rental portfolios in particular should check their income against the £30,000 level. Rental income across many UK areas has risen significantly — a director sitting below £50,000 today may not be below £30,000 by April 2027.
Tools That Help
For CT600 digital filing, HMRC publishes a list of recognised commercial software at GOV.UK. Most UK accountants already use practice-level tools that handle this. If you file independently, the main platforms used by UK limited companies include Xero, QuickBooks, Sage, and FreeAgent — all supporting Corporation Tax returns and iXBRL accounts.
For directors in scope for MTD ITSA, the same platforms handle personal income tracking and quarterly digital updates. You can use the same software for company and personal MTD reporting, or separate tools for each.
Our guide to the best MTD software for UK businesses in 2026 covers the main options across both use cases. If you’re weighing Xero against QuickBooks specifically, our Xero vs QuickBooks UK comparison covers CT600 compatibility, bank feed quality, and pricing across plan types. Directors running Sage should check our Sage vs Xero UK breakdown, which covers Corporation Tax, payroll, and MTD VAT handling across both platforms.
Common Mistakes to Avoid
Assuming MTD for limited companies doesn’t affect you personally. The company is outside MTD for Corporation Tax — but you as a director may not be. Directors with rental portfolios or parallel sole trades discover they are in scope only when an accountant reviews their total income picture. It happens more often than it should.
Confusing the CT600 change with MTD. The 1 April 2026 requirement is a filing method change. Not an MTD scheme. No quarterly updates, no MTD registration, no MTD-specific software required under that banner. Standard Corporation Tax software covers it.
Ignoring the threshold trajectory. The qualifying income bar drops to £30,000 in April 2027 and £20,000 in April 2028. A director with £35,000 in rental income is currently exempt. In twelve months, they won’t be. That’s not a future problem — it’s a planning problem that starts now.
Relying on an old accountant confirmation. Started receiving rental income recently? Changed your dividend strategy? Begun a side business? A previous “not in scope” assessment may no longer be accurate. If your income composition has changed, get it reviewed.
Where to Get Help
HMRC’s MTD for Income Tax guidance is at GOV.UK — go directly to gov.uk/guidance/use-making-tax-digital-for-income-tax for thresholds, registration, and software requirements.
For CT600 software, HMRC’s approved list is at gov.uk/guidance/corporation-tax-commercial-software-suppliers.
For directors uncertain about their personal MTD ITSA position, a qualified accountant or tax adviser can confirm scope based on your actual income figures. The Chartered Institute of Taxation (CIOT) and the Institute of Chartered Accountants in England and Wales (ICAEW) both maintain searchable adviser directories on their websites.
FAQ
Does Making Tax Digital apply to my limited company?
Not directly. MTD for Corporation Tax was cancelled in HMRC’s 2025 Transformation Roadmap. That said, from 1 April 2026 all UK limited companies must use commercial software to file CT600 returns and annual accounts — the joint HMRC/Companies House online portal closed 31 March 2026. This is a separate filing requirement, not an MTD obligation.
Do director dividends count towards the MTD ITSA threshold?
No. Dividends from your own limited company are investment income for tax purposes and don’t count as qualifying income under MTD ITSA. Only self-employment, sole trade, and property rental income count toward the £50,000 threshold.
I have rental income of £42,000. Am I in scope for MTD ITSA?
Not under the current £50,000 threshold from 6 April 2026. But the threshold drops to £30,000 from 6 April 2027. At £42,000 in qualifying rental income, you’ll be in scope in approximately twelve months. Plan for this now, not in March 2027.
My accountant files our CT600. Do I need to do anything differently from 1 April 2026?
In most cases, no. Accountants submitting CT600 returns through practice software were already on commercial tools — the change doesn’t affect them. Confirm with your accountant they’re using HMRC-approved software rather than the now-closed portal. If you file independently, switch to recognised software now.
