Making Tax Digital (MTD) for Income Tax applies from 6 April 2026 — many dental associates and hygienists will already be aware of how it affects them, but it is important to understand how MTD applies to dental practices operating under Expense Sharing Agreements.
If your practice operates under an Expense Sharing Agreement (ESA), it can sometimes feel like a ‘partnership’, but each dentist is ‘self-employed’ – and this is a vital point for Making Tax Digital.
Under HMRC’s MTD rules:
- Partnerships are excluded (for now)
- ESAs are unique, so HMRC do not reference
- Each dentist operating under an ESA is self-employed, so must comply with MTD.
Under MTD, individuals must keep digital accounting records, use HMRC‑approved software, submit quarterly updates during the year, and complete a final annual declaration.
Most off‑the‑shelf accounting software assumes either:
- One sole trader, or
- A traditional partnership
The issue is that dental practices operating under an ESA do not fit into either of these categories. This creates a real risk of incorrect digital records, misallocated expenses, and non‑compliant MTD submissions.
How can we help?
At BHP, we specialise in dental practices and have worked closely with Xero to develop a practical solution specifically for dental ESA structures.
Our approach ensures:
- Shared expenses are recorded and allocated correctly
- Each dentist maintains their own compliant digital records
- Quarterly MTD updates are accurate for each individual
- The system reflects how your practice actually operates
We offer flexible support, including:
- Xero setup tailored to ESA practices
- Training for dentists and practice teams
- Bookkeeping and quarterly MTD submissions
- Final annual declarations
Why Acting Now Matters
- MTD started 6 April 2026
- First submission is due 7 August 2026
Next Step
Get in touch with a member of our Healthcare team to arrange a no‑obligation MTD & ESA review to understand whether your current setup will be compliant and what needs to change before the first deadline of 7 August 2026.
This material is for informational purposes only and should not be relied upon as professional advice.
