Making Tax Digital for Income Tax (MTD for IT) represents one of the most significant changes to personal tax compliance in recent years. For dental associates in Scotland working in NHS, private, or mixed practices, the shift will change how business income and expenses are recorded and reported.  

This article explains what MTD for IT involves, how it applies to dental associates, and the practical steps you can take to prepare with confidence. 

What is Making Tax Digital for Income Tax?

MTD for IT is HMRC’s move to a fully digital reporting system for self‑employed individuals and landlords. When the rules become mandatory, you will be required to keep digital records of all business income and expenses, submit quarterly updates to HMRC using MTD‑compatible software, review and adjust those quarterly submissions, and finalise your income tax position through a digital tax return.  

The aim is to reduce errors, improve accuracy, and provide a clearer understanding of your business performance throughout the year. 

Who will it apply to and when?

Under current legislation, MTD for Income Tax Self Assessment begins in April 2026 for individuals with business or property income above £50,000. It will extend to those earning between £30,000 and £50,000 from April 2027. According to NASDAL Scottish statistics, most dental associates earn more than £50,000 per year and will therefore fall within the first group required to comply. 

What it means in practical terms for dental associates 

Dental associates have specific income and expense categories that must be captured digitally, including NHS statement income, private fee income, laboratory fees, professional subscriptions and indemnity, and CPD or training costs. Under MTD for IT, these records must be maintained digitally using software or spreadsheets that link directly to approved MTD systems. 

Key benefits of getting ready early 

Early preparation offers several advantages. Digital records and quarterly submissions provide improved visibility over profit levels, tax liabilities, and fluctuations in income or costs. More frequent data also supports better financial control, helping you identify trends such as rising laboratory fees or variable NHS income. Maintaining accurate digital records throughout the year reduces the scale of year‑end adjustments and improves accuracy. Starting early also spreads the learning curve and reduces pressure as the MTD start date approaches. 

What dental associates should do now

The first step is to move to approved cloud accounting software. HMRC publishes a list of compliant options, and commonly used systems include Xero, Sage, and QuickBooks. You should choose the option that best suits your business needs. 

Organising your data will make the MTD process significantly easier. Using a separate bank account for business transactions, understanding how to gross up income so that you report amounts before deductions, uploading receipts regularly through mobile apps, and providing your accountant with access to your software all help maintain accurate, up‑to‑date records. Small, regular habits prevent backlogs and improve accuracy. 

Key benefits for associates using digital software

Quarterly data can support better decision‑making, including budgeting for tax liabilities, planning major purchases, and monitoring pension thresholds or other income‑based triggers. Getting started early ensures you are comfortable with the system well before MTD becomes mandatory. 

Common questions from dental associates

• “Will I pay more tax under MTD?” 

No. MTD changes the reporting method, not the tax calculation. 

• “Is quarterly reporting like doing four tax returns?” 

No. Quarterly updates are summaries and are more straightforward once your digital system is in place. 

• “Will HMRC use quarterly updates to demand tax sooner?” 

No. As things stand, quarterly submissions are for reporting only. Payment deadlines remain unchanged. 

• “Do I need an accountant who understands MTD?” 

Yes. Working with an adviser familiar with MTD software and requirements helps ensure accurate submissions and year‑end statements. 

Find out more

MTD for IT will significantly change how dental associates manage their financial and tax affairs. However, with early preparation, appropriate digital systems, and the right professional support, the transition can be smooth and even beneficial. 

Digital record‑keeping provides clearer insight, improved control, and less pressure at year end. Preparing now ensures you are ready well ahead of the mandatory start date. 

If you would like to discuss any of this further, please don't hesitate to get in touch with your usual Johnston Carmichael adviser, a member of our Medical & Healthcare team, or by filling out the short form below.