Making Tax Digital for Doctors: Your Essential Guide to Compliance in 2026
Balancing patient care with administrative responsibilities has always been part of life as a doctor, especially for those combining NHS roles with private practice or locum work. Tax compliance, however, has often been something left until the final weeks before the Self Assessment deadline, creating unnecessary pressure during an already demanding year.
From April 2026, Making Tax Digital for Income Tax Self Assessment will fundamentally change how doctors with additional income report and manage their tax affairs. This guide explains what the new rules mean in practice, who is affected, the deadlines involved, and how professional support from specialists such as Sterling & Wells can make the transition far smoother.
What Making Tax Digital Means for Doctors
Making Tax Digital for Income Tax Self Assessment requires individuals with qualifying income to keep digital records and submit updates to HMRC throughout the tax year. Instead of completing a single annual Self Assessment return, doctors will provide quarterly summaries of income and expenses using HMRC compatible software, followed by a final declaration at year end.
For doctors, this primarily affects income earned outside PAYE employment. Private consultations, locum shifts, medical reports, expert witness work, and income from private clinics are all treated as self-employment income. While the change may feel significant at first, the system is designed to reduce errors, improve visibility over tax liabilities, and remove the stress of last-minute calculations.
Who Is Affected and Why Doctors Often Fall Within Scope
Doctors are required to comply with MTD if their combined gross income from self-employment and property exceeds £50,000 in the 2024 to 2025 tax year. Gross income is assessed before expenses and excludes PAYE salary, pensions, and dividend income. This means many doctors who consider private work a secondary activity may still fall within scope.
For example, a GP earning £35,000 from private sessions alongside £18,000 from rental income would exceed the threshold. Locum doctors working across multiple trusts may also find that irregular payments accumulate faster than expected. With thresholds reducing to £30,000 from April 2027 and £20,000 from April 2028, even doctors currently below the limit are likely to be affected in the near future.
Core MTD Requirements You Will Need to Follow
Under MTD, doctors must maintain digital records of all business income and allowable expenses using approved software. This includes recording dates, amounts, categories, and supporting details for items such as private fees, professional subscriptions, indemnity insurance, mileage, and conference costs.
Quarterly updates must then be submitted to HMRC through the software. These updates are not tax returns and do not calculate tax due. Instead, they provide HMRC with a cumulative summary of income and expenses for the year to date. A final End of Period Statement and annual declaration replaces the traditional Self Assessment return.
Understanding Quarterly Deadlines and Annual Submissions
The tax year will be divided into four quarterly periods. The first update covers 6 April to 5 July and must be submitted by 7 August. The second runs to 5 October with a 7 November deadline, followed by the third to 5 January due by 7 February. The final quarterly update covers the full year to 5 April and must be submitted by 7 May.
After the final update, doctors must complete an End of Period Statement to confirm all figures are correct. The final declaration and tax payment deadline remains 31 January following the end of the tax year. Although payment dates are unchanged, the earlier reporting schedule helps spread the workload and reduce year-end pressure.
Penalties and Why Early Compliance Matters
HMRC is introducing a points-based penalty system alongside MTD. Late submissions will accumulate penalty points, with financial penalties triggered once a threshold is reached. While the first year of mandatory compliance offers some leniency, persistent late filing or inaccurate reporting will still lead to fines.
Late payment interest and surcharges also apply if tax is not paid on time. For doctors with variable income, particularly locums, the ability to track liabilities throughout the year is critical. Regular updates make it easier to plan cash flow and avoid unexpected bills that disrupt personal finances.
HMRC Guidance and Support Available
HMRC provides detailed guidance for Making Tax Digital through its online resources, including step-by-step instructions, eligibility checks, and software listings. Doctors should pay close attention to guidance on qualifying income, mixed income scenarios, and agent authorisation if using an accountant.
The guidance is regularly updated, and early engagement is strongly encouraged. Doctors who stop or start private work mid-year must notify HMRC promptly to ensure obligations remain accurate. Relying on outdated assumptions can easily lead to non-compliance under the new system.
Choosing the Right Software for Medical Professionals
Selecting suitable software is a key part of successful MTD compliance. Doctors should look for tools that integrate with bank accounts, allow receipt capture, and handle irregular income streams smoothly. Mobile access is particularly useful for logging expenses while travelling between clinics or hospitals.
Software costs vary, but most options are far cheaper than potential penalties or the time lost correcting errors. Some doctors prefer spreadsheet-based systems supported by bridging software, while others opt for full accounting platforms. Sterling & Wells works with leading MTD compliant software and can recommend options based on individual working patterns.
Exemptions and Special Circumstances
Exemptions from Making Tax Digital are limited and must be formally approved by HMRC. They typically apply where it is not reasonably practical to use digital tools due to age, disability, or remote location. Most doctors will not qualify for exemption, particularly where basic smartphone or computer use is already part of daily work.
Temporary exemptions may apply in specific situations, but these should never be assumed. Doctors unsure about eligibility should check HMRC guidance early or seek professional advice to avoid missing registration deadlines.
Practical Steps Doctors Should Take Now
Preparation should begin by reviewing 2024 to 2025 income to confirm whether the £50,000 threshold is met. Doctors approaching the limit should assume they will be affected and start planning accordingly. Choosing software early allows time to familiarise yourself without pressure.
Organising records, reviewing allowable expenses, and forecasting future income will all make compliance easier. Many doctors also choose to register voluntarily ahead of April 2026 to test systems and workflows without penalty exposure.
How Sterling & Wells Supports Doctors with MTD
Sterling & Wells specialises in supporting medical professionals through complex tax changes. Their team manages the entire MTD process, from software setup and HMRC registration to quarterly submissions and year-end declarations. This ensures accuracy, consistency, and peace of mind throughout the year.
Beyond compliance, Sterling & Wells helps doctors optimise tax efficiency by identifying overlooked expenses and improving cash flow planning. With tailored support for locums, consultants, and private practitioners, they remove the administrative burden so doctors can focus fully on patient care.
Preparing with Confidence for 2026
Making Tax Digital represents a major shift, but it does not need to be disruptive. With early preparation, the right systems, and expert guidance, doctors can turn compliance into a structured and manageable process rather than a recurring source of stress.
April 2026 may feel distant, but the groundwork should start now. Reviewing income, selecting software, and seeking professional advice ensures a smooth transition and protects against unnecessary penalties. With the right support in place, MTD becomes another routine part of running a modern medical practice rather than an unwelcome surprise.
Sterling & Wells
We are Sterling & Wells — a UK-based team of accountants and tax advisors helping individuals and businesses stay fully HMRC compliant. From VAT and bookkeeping to self-assessments and tax planning, we’ve got your finances covered.