Making Tax Digital for Dentists

Making Tax Digital for Income Tax Self-Assessment (MTD ITSA) is the UK Government’s requirement for self-employed individuals and landlords to keep digital tax records and submit income and expense updates to HMRC quarterly, rather than filing a single annual Self Assessment return. It is part of HMRC’s broader programme to move the entire tax system to digital reporting.

If you are a self-employed dental associate or a dental practice owner trading as a sole trader, and your gross income from self-employment and property combined exceeds £50,000, MTD applies to you from 6 April 2026.

The threshold drops to £30,000 from April 2027 and £20,000 from April 2028. NHS-employed dentists with no private income or rental income above the threshold are not currently in scope.

From April 2026, the threshold is £50,000 gross income from self-employment or property. From April 2027 it drops to £30,000, and from April 2028 it drops to £20,000. These are gross income thresholds, not profit thresholds, so your turnover before expenses is what counts.

Your annual Self Assessment return is replaced by a five-report structure. You submit four quarterly updates summarising your income and expenses, with deadlines of 7 August, 7 November, 7 February and 7 May.

You then file a final end-of-year declaration by 31 January following each tax year, which confirms your overall tax position for that year.

Qualifying income includes gross income from self-employment and gross income from UK property. If the combined total of these two income streams exceeds the threshold, you are in scope for MTD. Income from employment, pensions and investments does not count toward the threshold but is still reported annually as part of the final declaration.

MTD ITSA applies to self-employed individuals, not limited companies. If you operate entirely through a limited company and take a salary and dividends rather than filing a Self Assessment as a sole trader, you are not currently mandated into MTD ITSA.

Corporation Tax digital reporting is a separate workstream that HMRC has signalled it will bring into scope in due course. If you are unsure about your trading structure and how it affects your MTD obligations, speak to our team.

You must use software that is compatible with HMRC’s MTD systems and can submit reports directly to HMRC. Samera uses and recommends Xero for all dental clients. A full list of compliant software is available on gov.uk. Spreadsheets alone are not sufficient unless they are linked to bridging software that can communicate with HMRC.

You can use spreadsheets but only if they are linked to HMRC-compatible bridging software that can submit your quarterly updates. A standalone spreadsheet with no direct HMRC connection will not meet the MTD requirements. For most dentists, moving to dedicated software such as Xero is simpler, more reliable and less prone to error than a bridging software workaround.

You are required to retain digital records for a minimum of six years under MTD ITSA.

HMRC operates a points-based penalty system for MTD ITSA. You accumulate a penalty point for each missed quarterly submission.

Once you reach the threshold number of points, a financial penalty applies. There is also interest charged on any tax paid late.

The points reset after a period of full compliance. HMRC has indicated it will take a supportive approach in the early stages of mandation, but the penalty framework is live from the point the rules apply to you.

You may be able to apply for an exemption if it is not reasonably practicable for you to use digital tools due to age, disability, remoteness of location or other factors. Religious objections to using computers may also qualify. Exemptions must be applied for through HMRC and are assessed on a case-by-case basis. If you think you may qualify, speak to our team before assuming you are exempt.

If your combined gross income from self-employment and rental property exceeds the MTD threshold, both income streams must be reported under MTD ITSA from the point you are mandated. Your rental income and expenses are reported quarterly alongside your dental income, and both are captured in the final end-of-year declaration.

MTD for VAT has been in place since 2019 and requires VAT-registered businesses to keep digital VAT records and submit VAT returns through compatible software. MTD for Income Tax is a separate requirement covering Self Assessment taxpayers.

If your dental practice is VAT-registered, you are likely already using MTD-compatible software for VAT purposes, which means the transition to MTD ITSA may be straightforward as your software infrastructure is already in place.

Our MTD ITSA Compliance Package covers quarterly record keeping, all HMRC submissions, your annual Self Assessment, software subscription, setup and a dedicated dental tax accountant. Pricing is based on your annual turnover and service level.

We also offer a standalone one-off training session at £750 + VAT for dentists who want to manage their own records with expert guidance on how to use the software correctly. Book a free consultation to discuss which option suits your situation.

Yes. If you are currently with another accountant or managing your own records and want to switch to Samera, we handle the full transition. This includes transferring your records into Xero, registering you with HMRC for MTD, and onboarding you into our digital workflow. We do this regularly and the process is straightforward.

Setup typically takes one to two weeks from the point you instruct us, covering software setup, HMRC registration and onboarding into our digital workflow. Given the April 2026 deadline is now weeks away, we recommend contacting us as soon as possible to ensure everything is in place before mandation.

Once you are set up with Samera, the day-to-day process is minimal. You scan or photograph your receipts and invoices and upload them to Hubdoc. Hubdoc feeds directly into Xero, where our team processes your records. We prepare and submit your quarterly updates to HMRC and handle your annual declaration. You do not need to log in to Xero or interact with HMRC directly unless you want to.

You need to sign up for MTD ITSA before your mandation date – it does not happen automatically. HMRC requires you to register through your software or through a tax agent acting on your behalf. Samera handles this registration as part of our onboarding process. If you are managing your own transition, make sure you register in advance of 6 April 2026 to avoid any gap in compliance.

Once you have been mandated into MTD ITSA, you will only be able to exit the scheme if your qualifying income falls below £20,000 for three consecutive tax years based on your filed returns. Dropping below £50,000 or £30,000 in a single year does not automatically remove you from the scheme.