Making Tax Digital for Income Tax within the medical sector

What is Making Tax Digital (MTD) for income tax?

Making Tax Digital for Income Tax is HMRC’s initiative to modernise the way individuals and businesses report their income. Instead of relying solely on an annual tax return, MTD introduces a system where records are kept digitally throughout the year. Taxpayers will submit quarterly updates to HMRC using approved software and then complete a final declaration by 31 January following the end of the tax year. The aim is to make tax reporting more accurate, timely and efficient.

Who needs to comply?

Currently, MTD for Income Tax applies to sole traders and landlords who are registered for Self Assessment and have qualifying income above certain thresholds. The rollout is being phased in:

• From April 2026, those with turnover over £50,000 will need to comply.
• From April 2027, the threshold drops to £30,000.
• A further reduction to £20,000 is planned, subject to legislation.

For medical professionals, this means that sole practitioners, such as GP locums, will fall under the rules if their self-employed earnings exceed these limits.

What about partnerships (e.g. GP surgeries)?

General partnerships, including GP surgeries, are not yet required to comply with MTD for Income Tax. Although HMRC originally planned to include partnerships from April 2025, this has been postponed indefinitely and no new start date has been confirmed. Importantly, a partner’s share of partnership profits does not count towards the MTD income threshold. Only income from other self-employed work or property would trigger the requirement.

In short, GP surgeries operating as partnerships can continue with their usual annual Self Assessment process for now. However, it is sensible to keep an eye on developments, as HMRC intends to bring partnerships into the MTD regime in the future.

Why does this matter for medical professionals?

For sole practitioners and locums, the administrative burden will increase once MTD applies. You will need to maintain digital records, submit quarterly updates and use HMRC-recognised software. For GP partnerships, there is no immediate change, but adopting digital bookkeeping early can make any future transition smoother.

What should you do now?

If you run a GP partnership, the best approach is to stay informed about HMRC’s plans and consider moving towards digital record-keeping now. Cloud-based accounting systems can help future-proof your practice.

If you are a sole practitioner or locum, check whether your income exceeds the thresholds. If it does, you will need to prepare for MTD from April 2026 or later. This means choosing compliant software, keeping digital records of all transactions and submitting quarterly updates alongside your final declaration. Deadlines for quarterly submissions will typically fall in August, November, February and May.

Need help?

Making Tax Digital for Income Tax will change how many medical professionals manage and report their income. Whether you are a GP locum, sole practitioner or part of a partnership, preparing early can make the transition much smoother.

If you would like advice on how MTD may affect you, or support with digital record-keeping and compliant software, our specialist medical team can help.

Get in touch with your usual Larking Gowen contact or email enquiry@larking-gowen.co.uk

Jamie Butcher