Quick answer: No. MTD for Income Tax applies to individuals, sole traders and landlords, not to limited companies. If you run your business through a limited company, your salary and dividends don’t count as qualifying income for MTD for Income Tax. A separate scheme, MTD for Corporation Tax, is expected eventually but has no confirmed start date.
This is one of the more common points of confusion once MTD for Income Tax becomes mandatory: business owners who trade through a limited company sometimes assume the new rules automatically apply to them too. They don’t, at least not yet, and not in the same way.
Why limited companies are excluded from MTD for Income Tax
MTD for Income Tax applies to individuals with qualifying income from self-employment or property, reported through Self Assessment. If you operate through a limited company, you’re not self-employed in the way MTD for Income Tax defines it; the company itself is a separate legal entity, and you’re typically paid via salary and dividends, neither of which counts as qualifying income for this scheme.
What does count if you have a limited company
If you also have income outside the company, from a separate sole trade, freelance work, or a personally-owned rental property, that income does count toward the MTD threshold in its own right, entirely separately from anything happening inside the company. A landlord who incorporated their portfolio into a limited company removes that specific property income from MTD for Income Tax scope, since the company, not the individual, now owns and reports on it. See should landlords incorporate before MTD for the wider trade-offs involved in that decision.
What’s coming for companies eventually
HMRC has indicated that MTD for Corporation Tax will follow at some point, but no firm start date has been set, and it’s expected no earlier than the second half of this decade. Until then, limited companies continue filing Corporation Tax returns under the existing rules, unaffected by the MTD for Income Tax rollout.
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