The Spring Statement, delivered by Chancellor Rachel Reeves, didn’t introduce new tax increases but focused on tighter HMRC enforcement, aiming to raise £2.2bn. Here’s what dentists need to know:
1. HMRC is Cracking Down on Tax Compliance
Whilst we haven’t seen a massive number of HMRC enquiries into our dentist’s taxes in recent years, we will now expect to see more scrutiny on:
✅ Self-employed associates – HMRC may begin to challenge employment status; several employment tribunals are currently in progress that could increase the taxation of associate dentists and practice owners.
✅ Expense claims – Documentation and a clear business rationale must support travel, Mileage diaries, CPD, and equipment deductions.
✅ Tax investigations – Increased enforcement means stricter checks.
💡 Action: Maintain accurate records to document all tax claims correctly and ensure that associates’ working arrangements meet self-employment status.
At SmallBiz Accounts, we offer peace of mind with fee protection coverage at an affordable price. If HMRC inquires into a dentist’s tax affairs, a third-party insurance company covers all accounting fees (excluding tax) associated with that HMRC inquiry.
2. Making Tax (AKA Your Accounts) Digital (MTD) is Still Coming
The Spring Statement did not change Making Tax Digital (MTD). MTD for Income Tax Self Assessment (ITSA) starts in April 2026, meaning dentists earning over £50,000 must file quarterly accounts updates instead of an annual tax return.
💡 Action: Self-employed dentists should use a dedicated bank account for only dentistry transactions, separate from any personal expenses. This dentistry bank account should be connected to digital accounting software to prepare for MTD.
At SmallBiz Accounts, we will be helping our dental customers with MTD education and software setup throughout the coming year to ensure they are MTD-ready well before April 2026.
3. NHS & Private: What’s the Impact?
🔹 NHS funding cuts may strain services.
🔹 More private patients as NHS access declines.
🔹 Less value in the NHS pension scheme due to reduced NHS dentistry participation.
💡 Action: Private dentists should prepare for growth, and NHS dentists should monitor reductions in income and consider tax-saving opportunities, such as operating through a limited company.
At SmallBiz Accounts, we are witnessing an increasing number of dentists transitioning from NHS dentistry to private practice. With that change, we review tax planning strategies and encourage working with financial advisers to secure pension, life assurance, and sick pay benefits.
4. Upcoming Budget and Potential Pension Tax Relief Changes
The Autumn Budget 2025, scheduled for release in October or November, is expected to introduce new tax changes. One key area for review is pension tax relief, with potential contribution changes that could reduce tax benefits for higher earners.
💡 Action: When tax rates are high, making pension contributions to offset tax costs is a smart strategy. However, the removal of higher-rate tax relief on pensions has been rumoured for years, and if implemented, it could significantly impact dentists by removing a valuable tax planning tool.
At SmallBiz Accounts, we encourage dentists to work with financial advisers and actively make introductions to ensure they maximise tax-saving opportunities through pension contributions.
5. Proactive Tax Planning is Essential
🦷 Incorporation – Is a limited company structure more or less tax-efficient?
🦷 Profit Extraction – Salary, Dividends, or Pension Contributions?
🦷 Expense Claims – Ensure you are claiming all eligible costs.
💡 Action: Review your financial position annually to ensure you legally retain as much of your income as possible.
At SmallBiz Accounts, we aim to educate and advise our dentists on tax compliance and tax-saving opportunities.
Final Thoughts
There were no tax hikes in this statement; however, fiscal drag, increased HMRC scrutiny, MTD enforcement, and potential changes to pension tax relief will all impact dentists. If the government needs additional funds to fill the £14 billion black hole, further tax changes may be introduced in the Autumn Budget.
Now is a great time to review your tax position.
