The Dental Business Guide
The Dental Business Guide
Making Tax Digital: What Dentists Need to Know
The tax landscape for dental professionals is undergoing a revolutionary transformation with Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA) set to begin in April 2026. This comprehensive webinar unpacks what this means for dentists and how to prepare for this significant shift in financial reporting.
For self-employed dental associates and practice owners earning over £50,000 in gross fee income, quarterly digital tax reporting will soon replace the traditional annual self-assessment. Rather than the familiar January rush, you'll need to submit updates every three months plus an annual finalisation. While this represents an additional administrative requirement, it also creates opportunities for more responsive financial management and tax planning.
The heart of MTD compliance lies in digital record-keeping. Paper receipts and manual systems won't suffice – you'll need HMRC-approved software that can track all business transactions and submit information directly to the tax authority. Separating business finances becomes crucial; dedicated bank accounts and credit cards for your dental work will simplify compliance significantly. The phased implementation means those earning between £30,000-£50,000 will join in 2027, followed by those earning £20,000-£30,000 in 2028.
We explore practical considerations including software selection, registration through accountants, and how the pilot program offers a penalty-free opportunity to test the system before mandatory implementation. While MTD admittedly increases the administrative burden for dental professionals, it also provides greater visibility of your financial position throughout the year, allowing for more strategic tax planning and potentially improved business decisions.
Ready to prepare your dental practice for the digital tax era? Book a consultation with our specialist dental accountants to assess your MTD readiness, explore software options tailored to your practice, and develop a compliance strategy that minimizes disruption while maximizing potential benefits.
All right, good evening. Good evening everybody. Okay, welcome to our webinar. Okay, lovely to see such a great turnout. I know the subject is tax and usually we mentioned the word tax and people run them are, but I actually know that people are very in this subject making tax digital and how it's going to impact individuals over the next few years. So we've had a really, really good sign up rate and I'm sure more and more people are going to be joining throughout the event through the webinar this evening.
Speaker 1:My name's Aaron, ok, and we've got Natasha, who's joining us shortly as well. Just add her to the screen in a minute. Um, and it's great to be here today. We've lately, we haven't done many webinars actually at samara and we're going to start trying to do a few more webinars on a regular basis to educate and help our client base understand the issues around tax, around business, all these things. So, without further ado, I'm going to introduce you to these things. So, without further ado, I'm going to introduce you to Natasha, if I can get you on there there you go, natasha, can you see yourself?
Speaker 2:Yeah, yes, sir, hi Aaron, hi Good afternoon.
Speaker 1:Yeah, how are you today, natasha? You okay, I'm good.
Speaker 2:Aaron, I'm good. How are you?
Speaker 1:All good, all good. So, natasha, just for everyone's benefit, where are you based in the UK? Where are you?
Speaker 2:I'm based in Lincoln so obviously we have remotely and I'm the accounting senior managing Samira. I deal with the accounts tax and now the MTD correct, correct?
Speaker 1:so Natasha's been with us for a few years and she's in charge of the whole accounting tax side of the organization and so if anyone some of our clients who may be on this call, and anyone who does come on board at some point, you'll probably have some uh conversation with natasha on on your affairs. But and uh, for my, for everyone else's benefit, as I said, I my name's aaron. I have got some slides about this, but I won't show those slides, I'll just talk about it. Um, I've been, I've had the lucky job of working with dentists for over 25 years. Okay, um, my first client was my wife. She's still my same first client, so I've still married her, so that's a a good sign.
Speaker 1:Um, obviously, we learned a lot um in helping my wife, but then we've literally helped hundreds of dentists, maybe even thousands of dentists, over the last 25 years, whether they're individual associates or to, whether they're group owners, to people who are selling, to people starting out. We've got the whole spectrum, and I'm based down in surrey but, as natasha said, we are based all over the country. Um, all over the world. We have team members supporting um clients. But let's, let's crack on, let's talk about what we've come here today, which is making tax digital, if I can say. All right, so let me get the slides up. Hopefully you can see these. Okay, can you see those, natasha?
Speaker 2:so I can yes, I can see it that's right.
Speaker 1:So so it's making tax digital for income tax self-assessment pizza. But then now you'll realize that accountants love um acronyms and if we, if you talk a bit with too many acronyms, I apologize in advance. We're going to try and make this a relatively light-hearted webinar. If you have got questions throughout the kind of the the time, please just drop them in the comments box and we'll try and answer them as we go along. Or, if not, just leave them to the end. Or, if it not, if you want to have a private conversation, we'll talk about how we can do that later so let's crack on.
Speaker 1:So, as I said, I've just myself. I looked a bit younger there, don't I? That was my 50th actually a few years ago, so I'm a few years older now, but, as I said, I've worked with dentists across the UK. I'm a chartered accountant. I trained with PwC a long, long time ago and I've had the joy of working with so many dentists and I've really enjoyed working with many dentists and we've got some wonderful clients, all shapes and sizes, across the UK and beyond. Actually, and Natasha, there's got a slide there. I've just put a few points for you. Natasha, that she's highlighted already. She's based in lincoln, um. She's got a little daughter which keeps her very busy, I know so, um, but, as I said, she's in charge of all our accounting and tax side of things and, uh, she's heavily involved and heavily um helpful to to many, many clients across the uk. So let's crack on. So, mtd, natasha, what is making? What is mtd? What is making? Tax digital?
Speaker 2:so I don't know just before I make a start on it. So this is a widely spoken topic at the moment. Okay, so wherever you go speak to our, people are talking about mtd, but I feel like we most of us doesn't have a good understanding what is MTD, what requirements is that, what we should be reporting, nothing such that. So I thought I think like we should really deliver the message to the audience over here about what is MTD and what are the next step they should take here. Okay, so MTD stands for, obviously I don't mention it's making tax digital right.
Speaker 2:So just a bit of history about MTAT. This was initially implemented for the VAT, which is back in 2020. It was launched back in 2020, which is for the VAT returns, where we need to report this VAT on a quarterly basis. So it's the same concept which is like for the self-assessment individuals and landlords. There's a requirement on registration from the hmrc to report this income and expenditure on a quarterly basis and some of these reportings on a quarterly basis. So that's all about the mtds, okay, so obviously we're going to talk about what is the requirement, what's the threshold that could apply for the mtd, which we're going to discuss on upcoming slides probably so okay.
Speaker 1:So you mentioned the vat thing, natasha, and obviously that's been rolled out and every quarter people have to do a vat return, um, online with digital software. So am I right in just clarifying for everyone's purposes, when this, when we when we'll talk about the effective date soon but literally every quarter, for those of people who this applies to every quarter a tax return has to be done, rather than the january rush only. There's going to be four tax returns in the year, plus the january return as well correct five.
Speaker 1:Five returns in a year so five returns, so one to five. I know a lot of people struggle just to get one return done, so the only way to get five returns done is to basically set up a system and have a process in place, correct? Correct yes, okay so let's crack on Any points to highlight here, and it all has to be done digitally, correct?
Speaker 2:So we need a software that is compatible to the MTD. So obviously there are some softwares in the market that should be approved by HMRC too, so we need, in a nutshell, the software should maintain all digital records and also bear in mind HMRC has a requirement to maintain the records for at least five years, so therefore it should be a very compatible and good software.
Speaker 1:So it has to be trusted software, and I think also the days of sending things with receipts and let in envelopes and all that type of stuff, it that was long gone, but this will be the final nail in the coffin, really won't it? So it has to be on a digital basis. Okay, cool, so, and it's uh, what's that?
Speaker 2:that is the other acronym so that is for income for uh, tax return, self-assessment right, which is like obviously say in a nutshell so the self-assessment tax returns Okay. So that is stands for. So we use ITS just for this purpose.
Speaker 1:Sure, okay, so I've kind of covered this. Instead of a single to return, there are four returns plus the January return. That has to be done, okay. But you've got one question that probably people are wondering, and I think there's a question here. Let me just get this right from an individual saying do all dentists have to file VAT returns? No, not at all. Just to clarify that we're just saying that the making tax digital system is like the VAT quarterly thing that was introduced in 2020, but now, going forward, you, as making tax digital, as dentists, you'll have to file quarterly returns for income tax, not VAT. As you're quite rightly said, dental services are exempt from VAT, so it has nothing to do with that. Just want to make that clear, so there's no kind of misunderstanding, because there's a question on that. So the one point to highlight here, though, natasha, is if they're asking us to do four returns and one final return, do people have to pay their tax quarterly?
Speaker 2:No, not really. At the moment, the requirement is just to submit the quarterly returns to HMRC. That's a requirement, you don't?
Speaker 1:have to pay it up. Quarterly returns to hmrc. That's a requirement. You don't have to pay it, yeah, okay, all right. So that's an important point to understand that you have to get organized, but you don't have to pay the rats quarter. Let's not about the tax quarterly, okay. However, I'm a cynic. I've been in this game for a long time. I'm pretty certain at some point down the line they'll be looking to get the tax paid quarterly. Why? Because the government is broke and they want cash coming in which can ultimately um feed our public services, etc. So right. So why is it being introduced?
Speaker 2:carry on, natasha so, uh, so the purpose of introducing mtd is obviously to increase the accuracy. Okay, so the from a two-month point of view, they want the individual self-assessment to focus on the business right rather than getting the tax return submitted. So that's the main purpose why it ain't been introduced by the HMRC. Ok, so therefore, like the records will be kept on a digital basis and they don't have to worry about, so, for example, if I give an example, so if the records have been made on a quarterly basis, the particular individual will know where they stand, what is my income, what's my expenditure. So that kind of helps them to do better tax planning to improve their business. So this is the ultimate purpose of why HMRs had to introduce such a system.
Speaker 1:OK, so OK. So you're right, as there's a phrase that I love to use what gets measured gets done, ok. So if you're measuring on a quarterly basis your performance, you can assess how you are, what you can do and hopefully improve your performance as well. So that will only help you. But also, it's a reporting mechanism, as natasha said to, for hmrc to perhaps, uh, collect tax further down the line. Okay, okay, good, good, good, right next slide and we can move it along. So what are the dates and timelines for sasha? So?
Speaker 2:so obviously many of you might know, it's going to start from next year, which is from april 2026, right? Uh, that is the start day for mtd, okay, and in terms of the threshold, so and uh, so, just to just the benefit of you, obviously that's a pilot testing. That's going for6, which is not mandatory for all of you right? So it's going to kickstart from April 2026, that's from 2026-27 tax year. Okay, so, talking about the threshold, right? So that will be. They'll be assessing based on the nearest tax return.
Speaker 1:Okay, for an example, or the most recent tax return. The most recent one okay.
Speaker 2:So, for an example, in order to check if the person qualified for the 26, 27, the qualifying income will be taken from 25, 26 tax return. Once this is admitted, HMRC will probably send a letter to the particular person to say, like you need to report this from this point onwards. Okay. So in terms of the threshold Arun, obviously for 26, 27, it stands as 50k. Okay, For the landlords and individuals right, and for the 27, 28, that will be like 30k and from 28, 29, it will be 20k.
Speaker 1:So just drop and drop. So they're basically trying to capture more people as time goes on. So they're starting at 50k. So, okay, we'll come on to the specifics of what that 50k is involved 30 and 20k, but in essence, if you you're working like most of the people on this call today will be a dentist, so quite a few will probably already most of you probably sit in the first year. But if you're slightly or you've been on maternity leave, you're not working that much, you may sit in a later year, further down the line. Okay. Now, this is, remember, only for people who are self-employed individuals or or and or landlords. Okay. But if you're trading as a company, you might not. It might not be applicable. It depends how you're set up. But these variations will have to be looked into on a case by case basis, correct, natasha?
Speaker 2:of course. So obviously not for the person who has a company and for the partnership doesn't applicable for them. It's at the moment just solely for the self employees and also landlords. Those are the categories here okay, cool.
Speaker 1:So how will it affect everybody?
Speaker 2:yeah, so obviously uh has been talking from the beginning. You need to maintain all these records on a digital basis. That includes income and expenditure. On a dentist point of view, all your associates pay slips. You should be digitalized. All your income and expenditures can be insurance insurance or it can be lab fee, it can be anything. We need to digitalize those. Okay, that should go into system and obviously we should have comparable software to process it right, and some of that on a quarterly basis, so every return will have a summary of income and expenditure. That will will be the summary of HMRC.
Speaker 1:Okay, all right, good, and that's done every quarter. So there's a great point that's written here. I'll read it out it's necessary to burden people with another regulation. Okay, people will find this practice very restrictive and cumbersome. Could the citizen refuse this regulation, not objecting to pay tax, but this paperwork? I hear that. Tax, but there's paperwork. I hear that and I and I to some extent agree with you.
Speaker 1:Okay, but the reality of the situation this is the world we live in of, uh, hmrc clamping down, government's clamping down, and, uh, it's just another process that we all have to do. Um, this is making tax digital. I know I've seen it in the dental arena, with so many people worried a few years about the whole cqc regulation, compliance, that type of thing. So this is just more compliance. Okay, um, don't shoot the messenger. That's all I ask. Okay, we're just, uh, sharing the information out there, and so you're aware, because you don't really want to get into trouble with hmrc, um, because, um, if you don't do the returns, they'll just be knocking on your door finding you charging interest and it just creates more headaches. So I wouldn't recommend that. But that's your call, okay, so next slide. Uh, we've kind of covered that, but just cover this again.
Speaker 2:Actually, natasha of course, and just to explain about the qualifying income I think that's the question being asked by most of our clients the qualifying income is your turnover for yourself, which is before your expenses. Okay, so for a dentist's point of view, all your gross fee is a qualifying income. So that is the category that HMR is looking in for. So obviously, as I just mentioned before, they'll be looking at the most recent summary of tax return to see what the threshold that you're going to fall into and whether you're going to need to report to MTD or not. So that's the diagram that we have shown here.
Speaker 1:So an example let's say an associate dentist generating 60K in fee income, OK yeah, and then they've got some other costs and stuff and it goes down to 48K. But since it's 60K, they would probably they would have to report Correct.
Speaker 2:Correct it's based on the gross income, it's not on the taxable income.
Speaker 1:Okay, and that's a sole trader, self-employed associate, basically, exactly.
Speaker 2:So obviously you also know that even the landlord should have to report it. For example, if a person has a combination of sole trader and a landlord, let's say like 30k and 20k 30k from sole trader and 20k from landlord the combination will make 50k. So because both of the income qualify as a criteria for the mtd, they have to mandate for the mtd, if that makes sense so that's okay, so that's.
Speaker 1:A very valid point here, though, is that we're talking about a sole trader doing their, let's say, a dentist, but if you're a landlord, you still need to be reporting this on a quarterly basis of your income coming in to your for your property, um, and that has to be submitted again, and that's so. A separate system would have to be set up for any income that's coming for your property again. So I'm just it's, it's these multiple income streams which will potentially cause more confusion and more burden and more paperwork. To be honest, don't?
Speaker 1:you think of course, and of course yeah yeah, okay, all right, sounds like fun and games, okay. So qualifying income you've kind of alluded to this.
Speaker 2:Yeah, I think I just covered that. Uh, so just an example that we have given the same exam just explained to you I don't know. One example if the gross income is before the expenses could be 25 from the rental income and 27 from the self-employment income. That's talking to 52k. So let's say that that would be applicable for the 25, 26. So therefore, that person has a mandate for MTD for 26, 27 tax year. Okay, so that's the qualifying income or gross income.
Speaker 1:Okay, all right, okay, good. And what about if someone's a new starter in the year and they think their income is going to be over 50k or something? How does HMRC look at that?
Speaker 2:So 50k or something. How does HMRC look at that? So probably they will prorate the information. So they will prorate for the entire year and based on that they will calculate it and we let you know whether you're going to qualify it and then they'll be officially issuing a letter to say, like you need to report to it. Mtd, hmrc.
Speaker 1:Okay, okay, all right. Fun and games all right. So what about exclusions?
Speaker 2:so for example like so you might know that we have some reliefs, right, the rental room relief, or it can be, uh, the trade real ones, which is thousand pounds, right, so such that would not be recorded as an income because you get the relief anyway. Okay, so that's an exemption. So let's say someone has I give an example right, so someone has rental income, right, and so I have a grant that for that they're going to get a room leave. So that's not an income. So therefore you don't have to mandate for the MTD, if that makes sense.
Speaker 1:Okay, so that's excluded, okay. Okay, there's always going to be some nuances, but we won't go into too much detail here. Okay, and then what about registration? What do they have to do Is?
Speaker 2:there a process for people, so obviously they can't register by themselves. They need an accountant and agent to do this, right, so you might issue the letter. That's what they do at first step and once they get a letter, they need to inform that particular accountant and agent and they need to put that into the agency system the agent system, right, and it is the name for MTD and then you can do the processing of it okay, and so, okay, okay and so they will.
Speaker 1:So they'll opt out automatically if it falls below 30 000 for three consecutive years.
Speaker 2:Yeah, so if someone wants to opt out of october from the mtd right, let's say that the income has been below 30 for the last last three years. They cannot opt out. But bear in mind it's going to be reduced to 20k.
Speaker 1:Yeah, yeah so so everything's changing anyways so all right, so so, but just to summarize so they can't register directly with hmrc. Everything has to be registered via an agent, correct? Okay so so, through a firm like ourselves, okay of course. Yes, so through a firm like ourselves, okay Of course, yes, it's a good accountancy firm.
Speaker 2:Yeah, it's a good accountancy firm.
Speaker 1:Okay, all right, cool, okay, anything here.
Speaker 2:Yes, so this is the exemptions Arun, obviously, the REIT, the REIT distributors or open and investment company partnerships, which I just explained before. Foreign businesses or non-residents. So these are some criteria that doesn't fall under MTD. Okay, and of course, exempt individuals, like qualifying income below, which is 50, 30, 20, based on the years, right, trustees do not have a report and those without an N9 number do not have to report. Digitally excluded. For some of the individuals, each of us might have said like you are digitally excluded, so therefore they don't have to report it. Okay, recip digitally excluded, so therefore they don't have to report it. Okay, recipients of mca bpn, lawyers and writers and those needing to use sa109 the residents are emitting basis, they don't have a report. And those with a power at only they don't have to report okay.
Speaker 1:So we're getting a few questions here, natasha. So I've got one question from someone saying um, the need to keep receipts is fine. I would imagine a monthly credit card statement detailing all payments would be okay. Fine, I would imagine a monthly credit card statement detailing all payments would be okay rather than digitizing each single transaction, yes, in an app.
Speaker 2:So usually I don't. We would not recommend having banks. Of course that's fine, that's the worst case. I would say okay, for every transaction it should be supported by an invoice or receipt. That is the correct way of the worst case if you don't have it. But they can do it. They can highlight the particular transaction, the bank statement, and upload that to the system.
Speaker 1:Probably correct, but I, I my my view is okay, you might have a credit card statement, but ultimately you want to. This is where some some of the really practical points that have to be start thinking is that if you have you separated, you have a separate bank account for your business. Okay, we've met people over the years who have mixed their personal business together. This is the time to get that organized, because this is going to be a nightmare otherwise for you and your accountants. Okay, in addition, I think um, as natasha said, you want to, that, you want to. You need to use software that's going to submit this off into hmrc um without minimal problems. So technically that's what you'll need to include. So if you have got credit cards and ideally that credit card should be just a company or business credit card, it has business expenses. Otherwise it's again. It's going to be a headache for everyone to to do it and ultimately more costly for anyone who's doing it. So the key things are to think of the system.
Speaker 1:What is the process I'm going to do? Silo your businesses. So what I mean by that? If you've got your sole trader dental bit, keep that all in one bank account. Keep that all on one credit card. If you have a landlord or property business, keep that in one bank account. Keep the expenses on one debit card, one credit card as well. That will just make your life a hell of a lot easier and then it'll be much easier for you to report and, honestly, it'll be much cheaper for you to report because, um, the costs will be just higher with people like ourselves or any other accountants. Okay, um, so I hope that clarifies that. There's another question what if you currently do your own self-assessment? What happens in that situation, natasha, if someone's doing their own assessment and but they qualify for making taxes? Well, they, they, they've been told you might see that they have to do making taxes. What? What happens in that situation?
Speaker 2:So, obviously, aaron, they need a software, definitely to report this. Obviously they need to sign up for it and have a software that is compatible with the making tax decision. But I would recommend seeking advice to an accountancy or maybe to an agent who's been registered with HMRC to make it better. Okay, because obviously it is advisable to go through an agency who's been uh, registered with the jamaica currency firm, because there might be more updates coming. This is just my change, so they keep them on top of it. It's always better, I think I think one thing to highlight is this is the big.
Speaker 1:This is just the beginning, okay of making tech digital. Remember, now we're talking here about income tax. We haven't talked about companies or anything like that. I'm not sure if anyone's picked up on that, but in a few years time, there'll be the same process or similar thing will be happening for companies if anyone's running their business through a company. So this, this is the beginning of all these things. So that's why we we whether it's us or someone else we can certainly help. However, one of the things natasha did allude to is that you could help, we could help you get set up on making tax digital with the software. But then if you want to do the process month by month, quarter by quarter, year by year, I can't see that being a problem as long as you've been set up right and doing it correctly, but always keep someone in your back pocket to support you if you need it. Okay, so summaries and dates just to quickly go through this.
Speaker 2:Sure. So obviously, as we explained before, we have to do four quarters and one return, so that five returns in total, right? So the quarter, the way the quarter starts from April, may, june, that has to be reported by August. So, like twice, that's one month and seven days time period for you to have some time to prepare it and submit it. So this is the quarter that we have break run here. So april, may, june, july, august in a year. Okay for any time okay, so, so, every.
Speaker 1:So the key column here is the last column the deadline. Deadline it has to be submitted. The first quarter has to be done by the 7th of august, the second one november, february and then may. So okay, I got it, got it okay. So what's this say? If trade commences on or after 6th of April, start. Yeah, this is what you mentioned earlier, the whole prorating it is exactly the same day, the start date for the.
Speaker 1:Okay, okay, so we won't dwell on this. It's a minor issue, okay and okay. What about errors? If it's been done wrong or it's been mistakes been made, how do they correct them?
Speaker 2:Well, obviously, on every quarter there might be some issues, some errors. Obviously, we might not be able to submit this information. For example, let's say someone hasn't given us information in the first quarter, might want to do it in the second quarter. Okay, the good thing is you don't have to go back to the first quarter and correct it. You can change that in the second quarter and subsequent quarters. So that's how the system works at the moment.
Speaker 1:So it's relatively straightforward. Yes, penalties. Yes, this is kind of referring to the point earlier. If you don't file your return, what are the penalties?
Speaker 2:So this penalty is based on the tax rate. That has been for the tax-assessment tax return, not for the MTG, by the way. Right.
Speaker 2:Okay, yes, this is for the tax returns, okay, and for the MTG, how it's going to work is based on the appointment system. That's a point-based okay. So every individual will be given some particular points, okay, which is kind of like grace period for you, right? Let's say, you be given some particular points, okay, which is kind of like grace period for you, right. Let's see how, 10 points allocated in a year and you have exhausted 10 points. From that point onwards, a penalty will be issued, okay. So it's going to be on a point based, not like straight away that they're gamifying.
Speaker 1:Penalties that's what they're doing. Is that right? They're gamifying and they're making game out of it, trying to kind of make it.
Speaker 2:Yeah, but one thing to bear on the, the penalty for the tax return, late submissions or interest. That wouldn't change. That's going to be the same anyway.
Speaker 1:Yeah okay, all right, sounding fun, guys, isn't it? Yeah, it's a, it's a late payment. Okay, again, same as charges yeah, yeah, so I won't dwell on that, but it's uh, so generally just run through this roadmap, I guess.
Speaker 2:Yes. So this is the process set up, right. What do you have to do for it? For like for you to like 100 percent get into this MTA, right? Obviously, number one thing is for you to understand whether you qualify or not. Ok, you just discuss what exemption. Some of the income is exempt, so you should know like which income going to qualify, right? So of course, hms is going to notify you as once they know like your income going to qualify for the mtg, they will notify that through and post. Okay, we have seen some of the clients getting letters already for the pilot testing, by the way, right.
Speaker 2:And then the second thing is to to do is like to ensure that you have a comparable software, right? So, obviously, all the records should be digitalized. So, therefore, like you should have a computer software that can record all your income and expenditure. Okay, that's enough. Step, step two and then getting a quarterly written summit on every quarter to hmrc, okay, and uh, consider how we can uh best help. Obviously, as arun explained, uh, we could really guide you on which software to choose, how to maintain your records and what are the reporting deadlines. So that's something that we can help you. And if everything is on being set up. You're all ready and you can go ahead with the NTT.
Speaker 1:So it's a logical process. It is another burden. I appreciate that, but it's the reality of the situation. But what's this pilot run, natasha?
Speaker 2:Yes, aaron. So of course, as many of you know, the MDD is coming into place from next year 6th of April, so we have time. But there is a pilot test that's running on at the moment. So anyone who would like to sign up or voluntarily opt in for the pilot test, if they can do, do so just to get a feel of how the system works. So obviously it's a new system, it's new for us, it's new for the individual attacks, everything. It's quite a new for everyone. So therefore, if you want to get a feel of it, just to understand the system, to send the system, you can opt in for the pilot testing. Okay, so obviously we have clients who are signed up for 25 26 pilot tests. We already have some of the clients who have signed up for it and we are doing that for them.
Speaker 2:Okay, it kind of the good thing about the pilot testing is it's it's a much gives an opportunity for you to do the returns every quarter. There won't be any penalty for late submissions whatsoever, okay, so let's say, uh, so there'll be four quarters every year for 25 26. That's a quarter from april to march. Let's say, you couldn't do the first two quarters can start from third quarter. So you can at least get a feel of one quarter in a year for the pilot testing, if that makes sense. So the entire point for us to like the system is quite daunting. None of us have a good understanding of how it works. Just to get a feel of it. That is all about pilot testing.
Speaker 1:I've got another question just fired in Can MTD be done on Excel as they do now, but just scan all the receipts?
Speaker 2:No, you can't. You need a software. You definitely need a software.
Speaker 1:Correct, correct. So I think, in a nutshell, no Excel has its part to play if it's just for your own record, but now, as you said, it has to be HMRC-approved software which sits to take the information that you're providing to them. Now you might put the basic information on Excel, but that information then needs to go to into the compliance software and then that needs to be processed accordingly. Okay, sorry guys. Then what you've talked about, the pilot, any other benefits to it, natasha?
Speaker 2:So obviously the system is new for everybody.
Speaker 1:And it's new for us as well.
Speaker 2:Of course, as you just explained, we have the back returns. We have done it's kind of a similar system, but it's kind of new for the taxpayers. So then, to understand what is the reporting, the thing is the tax return clients who are asked which I've've seen is the most challenging is to get the information on time, to get the digital records on time, so that will make them to get familiar with the system, how to maintain the records, what to report. So that's all about the benefit of getting the prior testing, just for you to understand how the system works. The entire system works.
Speaker 1:Sure, sure, yes, and in answer answer to the question you will have to bear the burden of software subscriptions. Um, that's, that's the reality of the situation.
Speaker 2:okay, so uh yeah, so this is the same thing I just explained, obviously for the pilot testing. The advantage of pilot testing is you don't have to sign up from the day one, okay, if you want to sign up the beginning of the year, or maybe, like in the middle of the year, you can do so. Okay, so that is something that's doable sure, sure.
Speaker 1:There's another interesting question what if your self-assessment income is part salary and dividends from a dental company?
Speaker 2:oh no, they will only assess the sole trader income, not the salary or dividend so, exactly.
Speaker 1:So, in answer to your question no, that wouldn't be forming part of making tax digital. Okay, um, it's just yeah. So you, because you're taking your salary and you're taking dividends, okay, and they're not part of the income of fee income that you're generating as an associate, or?
Speaker 2:a landlord, so that that wouldn't so just to add more to that, obviously, uh, the way at hms assets it will be, obviously they're going to access based on the related submitted tax returns. So there are some certain boxes, right when you submit an essay, 100 to hmrc, that will trigger to say like which income going to qualify. So obviously they would know, like from from the sector, sector, sector tax returns, which are the ones that are going to qualify for the self assessment sure, sure.
Speaker 1:And then another great question coming in will this software only be available via, via my account? In a nutshell, no, I think. I'm pretty sure you probably could get software out in the marketplace, but your accountant can usually probably get better rates. Okay for them. And that's what we're doing. We work with a few software providers and we're providing software, set up, training, etc. Etc. With for our clients and we provide it since we can. Since we buy in huge bulk, we can provide a better rate for our clients as well. So, but I'm sure you can find it externally as well if you look for it on somewhere. But, um, we, we, we would only choose certain software that we think is reliable. And, um, because there are lots of approved softwares that may link into hmrc, but, as we all know, in life certain things are better than others and you ultimately get what you pay for as well.
Speaker 2:So, um, in that respect, uh, so eligibility yeah, so the pilot testing is available, but there is some eligibility criteria that you should meet in order for you to qualify for the pilot testing. Number one is you should be a UK resident, of course, and your personal details your NIN number, your UTR number, your name should match with HMRC record Indiscrepancy will not allow you to qualify for the pilot testing and you must have a national interest number. You must have submitted at least one personal tax return to hmrc. Okay, the most recent, most recent return include sole trader and rental income. That's the criteria. Obviously, that you should not have any payment plan with hmr to see how payment plan to set your outstanding liability with hmrc. You will not qualify. Okay, you should not not cover any empty exemptions. These are the eligibility criteria. You should meet this criteria in order for you to sign up for the pilot testing, okay, yeah, okay, all right, and so then a couple of questions here.
Speaker 1:Would the software run on a tablet or would it need a computer? I'm pretty sure you can probably run it most softwares on the tablet most softwares come back with the even phone. Yeah, they're all you can probably do on your phone or tablet. You'd have to check it out, but I'm not sure. And is there a list of software that HMRC has said that's compatible? Natasha, yes, we do have.
Speaker 2:So what you can do is you can just go and type in, say, like HMRC-approved MTD, itsa softwares, so that will give you a list of softwares. But it's always advisable to check with someone who has got knowledge, because obviously not all the softwares might be that good. Okay, you need to test it.
Speaker 1:Yeah, what we'll do after this call. We will email people tomorrow or later in the week with the list of software, okay, so you can look at it and you might decide you do it yourself or whatever. Okay, that's fine, but if you need any help, we can certainly help. Okay, so, in a nutshell, impact on dentists this is this is the 99 of the people listening today. Um, what do you want to summarize? This is kind of summarizing what we've got.
Speaker 2:So the same thing obviously, anyone who qualifies for more than 50k of turnover or the gross income they need to report to mtd and you need to maintain records or digital records and income and expenses that include all your expenditures that can be received. So any sort of things right and you need to. You need to sum with the quality of the stretch of marcy via mtd compatible software, increase administrative workload. Obviously the workload is quite going to be high from us, from our side, because initially we just we were just doing only one tax return. Now we do like five returns. It's kind of a high workload from our side.
Speaker 2:So of course, additional cost for the software or maybe support software, something like an abundance is obvious and it kind of encouraged more for financial and tax planning. As I explained the beginning, right when you know that you're pushing on a quarterly basis, it's quite, quite transparent for you but to understand like what's the tax, right, when you know that you're pushing on a quarterly basis, it's quite transparent for you to understand like what's your tax position or maybe how you can employ your business. So it's kind of benefit on that point of onwards Okay.
Speaker 1:All right, so it's going to hit the vast majority of dental associates who trade as a sole trader in my experience over the years by that. And then how can we help natasha?
Speaker 2:okay. Well, obviously we can help with the entire entity process, okay. Okay, and we can help with selecting the uh mtb interior compliance software that is being approved by chmrc number one, right, we can provide training support to see, like, uh, how we're going to use the software, because that is something kind of a I feel like from my client point of they kind of like knowledge just how to use the software. So therefore, like we can train you and give some ongoing support to use the software, to maintain the records, okay, and we can do the. Obviously we can do the quarterly submissions and also the final year submission stretch of heart scene. Okay, and we'll make sure that clients uh complain with mtd it isC requirement as patronised legislation because that keeps on changing, and we can provide reminders in terms of what is the penalties in the charges that may apply for non-submission or non-payment and, of course, of a tax planning service as part of the MTD.
Speaker 1:Okay, cool, and I think that's a large last point is really interesting or important. I think quite often, many just see talk to their accountant once a year and just get their accounts done or tax return done in January, okay, and, and then, and then they do wait another year and do it again. This way, there's increasingly more touch points with the accountant Okay, throughout the year, which then offers the opportunity for you to have conversations with us or without with your accountants. Okay, um, because if you're doing a quarterly return, as you said, we can see opportunities. Oh, maybe you should be looking at putting more into a pension or putting more into something else, okay, to lower your tax liabilities. So I think, whilst it is, there's definitely an increased administrative burden with this. Okay, there could be opportunities as well, and I think that's a really important point to just get across here. Let's just get to the last slide or so. So if people need help, what do they need to do?
Speaker 2:So you can call with Aaron for me. Obviously, we can share the link with the people who are here Aaron for the meeting and you can contact by the call or email or maybe book a meeting with us.
Speaker 1:Yeah, I'll just share this link in here. I can find where it's all gone. I've lost the tab. Sorry, can you still see me? Yeah, I think my computer is all gone.
Speaker 1:Funny, hold on, bear with me a second, everybody, okay, sorry, yeah, thank you, you, thank you. Hello, is everyone there? Sorry, yeah, sorry about that. Everyone. The wonders of modern technology. I thought it was being clever and it didn't really work. So okay. So we had a we've kind of summarized all this. I was going to share a link. Actually modern technology. I thought was being clever and it didn't really work. So okay. So we had a we've kind of summarized all this. I was gonna share a link. Actually that's what I wanted to do. I can get this. Yeah, you can.
Speaker 1:You can book a call with Natasha and myself discussing Making Taxes, digital, the options available to you if we can help you. Natasha is probably more of the right person than I am to discuss this. She's more the expert dealing with this on a day-to-day basis. So please do go ahead and book a call. We will send you emails with information about the approved software list if anyone's interested in that. But for anyone who's keen on some help, I think the best bit is just to book a call with us, and everyone's got a case scenario. We can work it out. But I know there are a few more questions that have come through whilst I messed up the webinar. So one question is what evidence would a self-employed need for work from home expenses Well, that's not really directly related to making tax digital, but, natasha, what would, what would suffice for someone to show that they're they, they've got home expenses to claim their tax return?
Speaker 2:so that, of course, usually what you do is like that's for any standard tax return. Okay, uh, we used to do that on a program basis. Okay, just so, we have calculated assessment factor that we use from our site just to understand, like what is utility bills that they are paying? It can be mortgage, rent or utility bills. This is how to give the amount to us. We'll pour it based on the number of hours or days that work in a year and they will calculate the use of home.
Speaker 1:So that's, that's the calculator that we specifically use for our clients, okay and there's a couple of questions which seem to be similar but effectively the answer to the questions that they're asking when do you actually start? And it's actually from april 2026. You start from. Okay, so the records start from april 26 and then you start reporting on a quarter by quarter basis. Okay, um, in your opinion, what percentage will the account accountancy fees increase for making taxes? So, honestly, it's difficult to know. Okay, there will be an increase, but the increase will be smaller if you use the right software, if you get organized and, um, it's work, it's, it's done in a systemized manner. Okay, um, if it's a bit scrappy and it's built all over the place, I can guarantee that the fees will be higher. Okay, so we will assess it on a case-by-case basis. Any other questions from anybody else? This evening? We've been talking for about 45 minutes, so any last questions?
Speaker 2:no, natasha, any last comments to to say or say anything to anyone uh, no, of course, and so I would like to thank everyone here who's been presented for the webinar. Thank you so much much. Obviously, I don't explain. If you need help maybe it's empty filing or soft task please do reach out to us. We'll share the contact details with you, so you just can't go with me probably.
Speaker 1:Yeah, absolutely. Please do reach out. There's a couple, actually a few more questions that have come through. Actually, it's going back to that 50k limit if they're taking salary and dividends no, so if you're taking a salary or dividends up to 50k, this wouldn't be making tax digital required at this stage. Remember, it's the fee. It's a sole trader business okay. If you're generating fee incomes as a sole trader or if you're a landlord, okay, that's what making taxes specifically applies.
Speaker 1:In terms of software that we're pushing, there's there's a couple of softwares I'd rather just send. We'll talk to clients on a case-by-case basis because each software will be different for each client, so I don't want to say a specific one. But there are the big brands out there that do the soft, that do this, okay, and we might use the big brands, but sometimes we might just use the uh, something simpler and lower cost as well. Okay, wonderful. Thank you, uh, for your time. Guys appreciate. It's a tuesday night. You want to probably get away from talking about tax and have some dinner or do something more fun. But again, if you need any help, please do reach out, um, contact us and book a call and, uh, we'll be here to help.
Speaker 2:Thank you thank you, everyone thanks welcome.