Does Making Tax Digital apply to limited companies?

No. Making Tax Digital for Income Tax, which began on 6 April 2026, covers individuals: sole traders and landlords registered for Self Assessment. A limited company uses Making Tax Digital for VAT if it is VAT registered.

Making Tax Digital (MTD) is not one scheme. It is a set of rules for different taxes, and each has its own start date and its own list of who must use it. If you trade through a limited company, it helps to keep them apart.

Who MTD for Income Tax covers

GOV.UK says you need MTD for Income Tax if you are a sole trader or a landlord registered for Self Assessment, you have self-employment or property income, and your qualifying income is over the threshold. The thresholds are over £50,000 from 6 April 2026, over £30,000 from 6 April 2027 and over £20,000 from 6 April 2028, measured on your 2024-25, 2025-26 and 2026-27 tax returns.

A limited company is none of those things. GOV.UK says that if you run a limited company you are not self-employed, even if you are the owner and the only employee. The company works out its taxable profit and pays Corporation Tax on it.

Your own income from the company does not bring you into MTD either. Qualifying income is self-employment and property turnover only. GOV.UK lists employment (PAYE) income and dividends, including dividends from your own company, as not counting.

How it applies, structure by structure

The fourth row is the one to check. A director who owns a buy-to-let in their own name, or does private jobs as a sole trader alongside the company, is judged on that personal turnover.

MTD for VAT

GOV.UK's VAT Notice 700/22 says MTD for VAT requires all VAT-registered businesses to keep records digitally and file VAT returns using software. That includes limited companies. A business must register for VAT if its taxable turnover for the last 12 months goes over £90,000, or is expected to go over £90,000 in the next 30 days. So a VAT-registered building company is already doing MTD, just for VAT.

MTD for Corporation Tax

HMRC consulted on how MTD might work for Corporation Tax, from 12 November 2020 to 5 March 2021, and published a summary of responses on 30 November 2021. The GOV.UK pages we checked on 16 October 2026 give no start date for it. For now, directors prepare the company's accounts and file its Company Tax Return in the usual way.

CIS through a company

Limited companies can be CIS subcontractors too, but the deductions work differently. GOV.UK says a company uses its payroll scheme to set CIS deductions against what it owes, through the Employer Payment Summary. It also warns not to use the Corporation Tax return to pay tax with your deductions. None of this runs through MTD for Income Tax.

What this means for you

If you trade only through your company and take a salary and dividends, MTD for Income Tax does not apply to you. You may still need a Self Assessment return for other reasons: GOV.UK says shareholders may have to pay Income Tax on dividends over £500. If the company is VAT registered, it is already under MTD for VAT.

If you are a sole trader thinking about your structure, MTD is one factor among many. The tax, legal and paperwork differences go well beyond quarterly updates, so get help that fits your own figures.

Steps to check where you stand

1. Write down how you trade: sole trader, limited company or partnership.
2. If you have a company, check whether it is VAT registered. If it is, it already follows MTD for VAT.
3. Add up any turnover you earn personally from self-employment and property, before expenses.
4. Compare that with the threshold: over £30,000 on your 2025-26 return means MTD from 6 April 2027.
5. Leave salary and dividends out of that sum, as GOV.UK does.

The free MTD check works out your personal position, and the trades section covers CIS and MTD for sole traders.