What is Making Tax Digital for therapists?

At the Mill Hill Therapy Hub, we know private practice involves far more than client work. Making Tax Digital for Income Tax (MTD for ITSA) may feel like one more task, but the right setup can make things much easier 😊

What is Making Tax Digital for Income Tax?

MTD for ITSA means keeping digital records, sending quarterly updates to HMRC and submitting an end-of-year return or final declaration through compatible software.

Based on current GOV.UK guidance, it applies to qualifying income from self-employment and property before expenses:

• Over £50,000 from 6 April 2026
• Over £30,000 from 6 April 2027
• Over £20,000 from 6 April 2028

Please check the latest HMRC guidance, as eligibility depends on your circumstances.

Which software could suit your practice?

HMRC does not endorse a specific provider, but these are common options:

• Xero: cloud accounting and reporting. Roughly £15–£65 per month.
• QuickBooks: bookkeeping, invoicing and expense tracking. Roughly £10–£56 per month, often with promotions.
• Sage: established accounting software. Roughly £7 per month for its sole-trader paid option, with wider plans often around £20+ per month. Sage also has a free sole-trader option for some eligible non-VAT-registered users.
• FreeAgent: bookkeeping, invoicing and expenses. Eligible NatWest or Mettle business-account customers may be able to use it at no extra software cost while they keep a qualifying account. If not, paid plans are roughly £17–£33 per month.
• Bridging software: useful if you prefer spreadsheets. Some options are free or low-cost, while others are roughly £5–£20 per month.

All prices are approximate and subject to change. VAT, billing terms and introductory offers may affect the real cost. Always check the provider’s current pricing and confirm the exact product and plan supports MTD for Income Tax. You can also use HMRC’s official software finder.

What should you do next?

Start keeping records consistently, separate business and personal spending where possible and review income and expenses regularly 📊

This article is for general information, not tax advice. Please check directly with HMRC or consult a qualified accountant about your own situation.

And while you are streamlining your practice, why not book a chat with Marc about room rental and membership at the Mill Hill Therapy Hub?