Making Tax Digital for self-employed dentists
Whether you’re an associate dentist or run your own practice, the UK tax system is undergoing one of its biggest changes in years. Making Tax Digital (MTD) is transforming how self-employed professionals record and report their tax – and dentists are included. This blog breaks down what dentists need to know and how to be ready.
What is Making Tax Digital?
Making Tax Digital is a government initiative designed to modernise the UK tax system by moving from annual paper-based tax returns to ongoing digital record keeping and reporting.
Self-employed individuals which fall under the regime will be required to provide quarterly updates on their income and expenditure throughout the tax year, followed by a fifth and final tax return covering the full 12 month tax period.
Who must comply?
As a self-employed dentist you’re likely to be affected if:
- You’re registered for Self Assessment.
- You earn income from self-employment (e.g. associate fees or your own practice).
- Your total qualifying income is above the relevant thresholds – and for most dentists, that’s almost certainly the case.
Income thresholds and timelines
MTD for Income Tax is phased in over several years:
Start date Threshold (qualifying income)
6 April 2026 Over £50,000
6 April 2027 Over £30,000
6 April 2028 Over £20,000
Qualifying income usually includes gross income from self-employment and property (before expenses). The threshold figure is cumulative, so if you are self-employed and own property then the combined income of the 2 would be in consideration.
If your income exceeds these figures, you’ll have to follow the digital reporting rules from the relevant date above – and most self-employed dentists will hit the first threshold of £50,000.
What changes under MTD?
1. Digital record-keeping
Under MTD you must keep your business income and expenditure records digitally using software that works with HMRC’s systems. Paper records or simple spreadsheets alone won’t be sufficient unless they are connected via bridging software that meets HMRC’s digital link rules.
Digital records must capture:
- The date of income/expense
- The amount
- The category/type (e.g. fees, materials, travel)
Our existing Dental clients are already set up on MTD compatible software called Xero, which we have used for many years, and any clients who onboard with us going forward will also be set up on the software.
2. Quarterly updates instead of one annual return
Instead of just submitting one Self Assessment return after year-end, under MTD you must:
- Submit four quarterly summaries of your income and expenses
- Send a final declaration after the tax year ends
Typically the quarterly update deadlines are:
- 7 August (for period to 5 July)
- 7 November (to 5 October)
- 7 February (to 5 January)
- 7 May (to 5 April)
Then you still file a year-end tax return and pay what you owe by 31 January following the tax year (the second payment on account by 31st July will also still apply).
This structure gives HMRC more regular snapshots of your tax position, and it gives you a clearer picture of profits and liabilities as the year progresses.
If you’re still using paper receipts or simple spreadsheets, now is the time to adopt a compatible digital system. This will save time and reduce errors – and getting established with software early avoids a last-minute scramble as deadlines approach, which Robson Laidler would be more than happy to help with.
Penalties and compliance
HMRC will be introducing a similar penalty system for late filing to that of the VAT regime, which is a points-based system. Each late filing occasion will be 1 point and will accumulate if late filing persists. Once you have been given 4 points, there will be a £200 penalty, with the ability to reduce your points again simply by being compliant.
Late payment interest and penalties will also apply for any missed payment dates as they have done previously.
Need help? Get in touch with us:
If you’re a self-employed dentist and want clarity, confidence and practical support with MTD for Income Tax, we’re here to help. From setting you up on MTD compliant software to managing your quarterly reporting and year-end returns, our specialist team can take the pressure off and make sure you’re fully prepared ahead of the deadlines.
Get in touch with us today at: healthcare@robson-laidler.co.uk