How making tax digital will affect GP locums

What is MTD?

The UK Government first announced MTD in 2015 as part of its strategy to modernise the tax system and improve transparency and efficiency in tax administration. For GP locums, the key point is that HMRC increasingly expects business records to be kept digitally, with income and expenses recorded in compatible software rather than pulled together once a year from spreadsheets, bank statements or paper notes.

The first phase of the programme, MTD for VAT, became mandatory in April 2019 for VAT-registered businesses with taxable turnover above the VAT threshold. The next stage is Making Tax Digital for Income Tax, which came into effect from 6 April 2026 and is particularly relevant to GP locums who trade as self-employed individuals.

What is MTD for Income Tax?

MTD for Income Tax requires certain taxpayers, including sole traders and landlords, to keep digital records and submit quarterly updates to HMRC using compatible software. A GP locum who invoices practices directly, receives freelance clinical income, or has private/self-employed income may fall within the rules if their qualifying income is above the relevant threshold.

Which GP locums must comply with MTD for Income Tax?

• From 6 April 2026, if your total gross income from self-employment and/or property exceeds £50,000.
• From 6 April 2027, the threshold drops to £30,000.
• From 6 April 2028, it’s reduced further to £20,000.

What counts toward the income threshold?

Only gross income from self-employment and property counts. For a GP locum, this would usually include self-employed locum income before deducting expenses, plus any rental income if applicable. Employment income, pensions, dividends, and partnership profit shares do not count toward the MTD qualifying income threshold.

How can GP locums prepare for MTD for Income Tax?

If you already keep digital records in cloud-based bookkeeping software, the transition should be straightforward. The main change is that you will need to submit quarterly updates to HMRC through MTD-compatible software. GP locums who currently rely on spreadsheets, paper receipts or year-end bookkeeping should consider moving to a digital system sooner rather than later.

How should GP locums comply with MTD for Income Tax?

GP locums should:

• Keep digital records of locum income, practice payments, pensionable income where relevant, mileage, professional fees, subscriptions, medical indemnity and other allowable business expenses.
• Submit quarterly updates to HMRC through compatible software, rather than waiting until the end of the tax year.
• Finalise your annual tax position through MTD-recognised software, including any adjustments, allowances, pension entries and other Self-Assessment information.

Practical points for GP locums

There are a few practical steps GP locums can take now:

• Review your 2024/25, 2025/26 and 2026/27 gross locum income to identify when you may enter MTD.
• Check whether your bookkeeping software is MTD-compatible or whether bridging software may be required. Your Locum software may be compatible allowing a smoother process for submitting your information to HMRC.
• Keep records up to date throughout the year so quarterly submissions are based on accurate income and expense figures.
• Make sure locum income, NHS pension entries, mileage, indemnity, GMC fees, training costs and other professional expenses are recorded consistently.

Are there exemptions to MTD for Income Tax?

There are some exemptions, including:

• Trusts, estates, and some partnerships.
• Individuals with digital exclusion (e.g. due to age, disability, or remoteness).
• Those without a National Insurance number.

What’s next?

GP locums should take time to review their income, check whether their current bookkeeping software is MTD-compatible, and start keeping digital records up to date ahead of the relevant deadline. If you are unsure when the rules will apply to you, or what steps you need to take, it is worth seeking advice early so you can prepare with confidence.