Just gearing up for the most significant change to the personal tax since the self-assessment tax return started in 1997.
This is our first email to our existing associate dentist customers outlining how Making Tax Digital will affect them, and how we at SmallBiz Accounts will support them to get ready for digitalising their accounting records for the Start of Making Tax Digital in April 2026.
I’m writing to inform you about a HMRC change that will affect you as a self-employed dental associate.
You may receive letters and be aware of an upcoming high-profile media campaign from HMRC, as well as marketing from software providers, which is part of a broader awareness campaign of a change to the current self-assessment tax system called Making Tax Digital for Income Tax (MTD)
From 6 April 2026, if your self-employment and/or property income exceeds £50,000, the threshold is based on gross income (before any deductions, such as lab fees or associate fees). You’ll be required to comply with MTD rules.
While this initiative has experienced several delays over the past decade (nearly 10 years since it was first announced), we have confirmation that the April 2026 implementation date is proceeding as planned.
What does this mean for you?
- You’ll need to maintain digital records of all associate income and expenses.
- HMRC will not be providing software, so you will need a subscription to simple, affordable commercial software like Xero or FreeAgent (Natwest), which are the ones we initially partnered with.
- Submit quarterly updates of your total associate revenue and expenses to HMRC.
- Complete a final digital tax return annually (you’ll still need to report other income like salary or dividends)
This new system will replace the current Self-Assessment process; however, your tax payments will remain unchanged and will still be due in July and January as usual.
Note: MTD for Income Tax does not apply to partnerships or limited companies.
Despite the name “Making Tax Digital,” this initiative is about digitising your accounting processes rather than changing how tax works. In our professional opinion, it could benefit from a complete rebrand to better reflect what it requires from self-employed taxpayers.
Benefits of the new system:
- It helps spread the tax reporting burden throughout the year
- Provides real-time financial insights, enabling better tax planning
- May help you make more informed financial decisions year-round
The good news? As our valued client, we’re offering to set up and provide you with compliant software (approximately £100 per year) at no additional cost until April 2027, provided you allow us to set it up for you before March 2026.
We’re also planning some friendly, informative sessions to walk you through everything – details coming soon!
We’re excited about this: The new system will provide better insights into your finances throughout the year, potentially aiding in tax planning and informed financial decisions.
Next steps? Nothing urgent needed right now. If you’d like to stay ahead of the curve, we can discuss digital accounting options that would work well for your practice.
You also have the option to participate in HMRC’s MTD testing programme from 2025 to 26, which offers an excellent opportunity to familiarise yourself and us with the new process early, without incurring penalties.
If you have any questions or concerns, reply – we’re here to make this transition as smooth as possible.
Warm regards,
SmallBiz Accounts
P.S. For the curious, here’s the official guidance Use Making Tax Digital for Income Tax – Guidance – GOV.UK
