Making Tax Digital (MTD) is one of the biggest changes to the UK tax system in recent years and is now being rolled out.
The system has been introduced by HM Revenue & Customs (HMRC) to reduce errors in tax returns and modernise the tax reporting process, and includes mandatory digital record keeping and quarterly submissions via approved software.
Who does Making Tax Digital apply to?
From 6 April 2026, MTD applies to sole traders and landlords whose gross income (before expenses) from self-employment and/or property exceeded £50,000 in the 2024/25 tax year.
Sole traders includes:
- GP and dental sole practitioner practices
- GP locums
- Dental associates
- Dental expense sharers
HMRC has already written to many individuals it believes are within scope. However, the responsibility for compliance remains with the taxpayer, even if you have not received a letter.
MTD does not currently apply to:
- GP and dental partnerships
- GP and dental limited companies
If you are unsure whether MTD applies to you, we recommend speaking to your accountant to confirm your position.
What do I need to do next?
Step 1: Are you registered for MTD?
Although HMRC has contacted individuals who are required to report under the new rules, this does not mean you are automatically signed up for MTD.
Registration needs to be completed by either:
- you, or
- your accountant, provided they are authorised as your tax agent.
If you have been notified that you are impacted by MTD, registration can be completed online via the government website here.
Step 2: Have you set up MTD‑compatible accounting software?
Under MTD, you must:
- Use accounting software that is compatible with MTD
- Submit information directly to HMRC through that software
If you already use accounting software, this should now be reviewed to ensure:
- It meets MTD requirements
- It is correctly set up for quarterly submissions
Spreadsheets alone are not sufficient unless they are digitally linked to MTD-compatible bridging software.
Step 3: Bookkeeping
MTD requires digital records to be kept throughout the year, not just at year end.
This includes:
- Keeping digital records of income and expenses up to date
- Maintaining separate records for each source of income (for example, self-employment and rental income)
- Ensuring records are accurate and complete before each submission
Good bookkeeping is now essential to staying compliant.
Step 4: Quarterly submissions and deadlines
Instead of submitting just one annual tax return, MTD introduces Four quarterly updates during the tax year.
Quarterly updates:
- Summarise income and expenses
- Are cumulative
- Must be submitted one month and 7 days following the end of each quarter. For example, for the quarter ended 30 June 2026, submission should be made by 7 August 2026.
Do I still need to complete a year-end tax return?
Yes, you will still need to complete a year-end self-assessment tax return. MTD does not replace the year-end self-assessment tax return.
The deadline for the submission of your year-end self-assessment tax return will continue to be 31 January (for 2026/27, the deadline for submission being 31 January 2028).
The tax payment deadlines of 31 January and 31 July will remain the same.
Will I get a penalty if I do my quarterly submission wrong?
HMRC has confirmed that during the initial rollout:
- A supportive approach will be taken to quarterly submissions
- There will be no penalties for inaccuracies in quarterly updates while taxpayers adapt to the new system
Because submissions are cumulative, errors or omissions can be corrected in later quarters.
However:
- Penalties will continue to apply if the year-end tax return is submitted late
How can we help?
We work with our healthcare clients to ensure they are fully prepared for MTD. Our support can include:
- Confirming whether MTD applies to you
- Registering you for MTD
- Setting up MTD‑compatible accounting software
- Providing training on MTD software
- Providing ongoing bookkeeping support
- Managing both quarterly and year-end submissions
If you would like to discuss how MTD affects you or need help getting up to speed, please get in touch here.
This material is for informational purposes only and should not be relied upon as professional advice.
