Making Tax Digital for counsellors and psychotherapists starts in April 2026.
If you are anything like me, your first thought might be, ‘How can I do this in a way that suits me, not in a way that suits accounting software?’
This post is for UK counsellors and psychotherapists in private practice who complete Self Assessment.
I will be honest. It does feel wrong that we may have to pay software companies just to send our tax information to HMRC. However, once I looked into it properly, and spoke to an accountant, it felt less dramatic than I first thought, especially if your bookkeeping is fairly simple.
Usual note: this is a practitioner to practitioner overview, not tax advice. So if you are unsure, please check with your accountant or HMRC.
What is actually changing?
Making Tax Digital, often shortened to MTD for Income Tax, means keeping digital records and sending quarterly updates to HMRC using compatible software.
The biggest change is that instead of doing everything once a year, you will be sending updates during the year.
That does not mean paying tax four times a year. Instead, it means sending figures in four times a year, then finalising everything properly at the end of the tax year.
So, in plain English, this is mainly about how you send your figures in. It does not mean you have to completely change the way you do your accounts.
Does it apply to counsellors and psychotherapists?
It applies based on your qualifying income. In other words, that means your gross income or turnover from self employment and or property.
From 6 April 2026, it starts with people over the first income threshold, because HMRC is bringing it in in stages.
So even if you are not in the first group, it is still worth understanding now. After all, it may affect you later, and it is usually easier to get your head round these things before they become urgent.
Your three realistic options
Option 1: Keep your spreadsheet and use bridging software
This is the option I am taking.
I keep my practice accounts on a spreadsheet. It works well for me because my business is quite simple and I do not have lots of expenditure.
When I spoke to an accountant, I expected to be told I needed to move everything into an app. However, that is not what happened. Instead, they said my spreadsheet system was fine. I do not need an accountant, and they showed me bridging software instead.
Because I already use Microsoft, I have chosen VitalTax as my bridging software. It works with spreadsheets, which suits me far better than moving everything over to a full accounting app. I have not used it for a real submission yet, so I will update this post in June 2026 once I have tried it properly.
So if you are happy with spreadsheets, this may be the easiest and least disruptive option.
Option 2: Use an accounting app such as Xero or QuickBooks
Some counsellors and psychotherapists may prefer an app because it takes some of the mental load away.
Usually it works like this:
- Connect your business bank account
- Check and match things each month
- Send your quarterly updates
I can see why people like this option. The apps can be easy to use, they keep things up to date, and you can often check your figures on your phone.
However, one thing to think about is whether the app works with the systems you already use. For example, if you take card payments through Stripe, or if you have different income streams such as therapy, supervision or training, it is worth checking that it all works together.
Option 3: Use bank based tools
I am also hearing more therapists talk about business bank accounts that may build Making Tax Digital features into their apps.
That could be a very good ‘keep it simple’ option, as long as it is genuinely compatible with MTD for Income Tax.
As I write this, Starling Bank says it is going to offer free HMRC recognised Making Tax Digital software with its sole trader account. Their message is basically, ‘Why pay, when you do not have to?’ I have to admit, I like that. It is good to see a bank trying to make life easier for sole traders instead of turning it into another cost.
However, do be careful here. Some tools are built for VAT rather than Income Tax, so always double check that it works for the kind of MTD you actually need.
How to choose without disappearing into an admin rabbit hole
First, check whether you are affected from April 2026, or likely to be later.
Then decide whether you want to keep using a spreadsheet with bridging software, or whether you would rather move to a full app.
Whatever you choose, make sure it is on HMRC’s compatible software list.
It is also worth doing a practice month before the rules start. That way, you are not trying to learn a new system when you are already under pressure.
And honestly, put the quarterly deadlines in your diary now. Your future self will thank you.
A quick confidentiality note, because we are therapists
One practical point. In your bookkeeping records, it is usually better not to include anything that identifies a client.
So a lot of therapists use initials, invoice numbers, or a neutral client code in their accounts, and then keep their clinical records separate.
Quick FAQ for counsellors and psychotherapists
Does Making Tax Digital apply to sole traders?
Yes. It can apply to sole traders and landlords once they reach the income threshold for the stage HMRC is bringing in.
I do not earn enough yet. Do I need to do anything?
Not necessarily. If you are not in the first group, there is no need to panic. However, it may still help to choose a simple system now, whether that is a spreadsheet or an app, so you are ready later on.
Do I have to buy QuickBooks or Xero?
No. Some therapists will prefer those kinds of apps, but others will carry on using spreadsheets with bridging software. The important thing is that whatever you use must be compatible with MTD for Income Tax.
Can I keep using Excel or Google Sheets?
Often, yes. But you will usually need bridging software so your spreadsheet can send the quarterly updates to HMRC properly.
What do the quarterly submissions actually look like?
From what I understand, it is more a case of checking your totals and submitting them than completing a full tax return every quarter. I will write a more practical update once I have done my first real one.
I already feel overwhelmed by admin. What is the simplest option?
That is completely understandable. For some people, the simplest route will be spreadsheet plus bridging software. For others, it will be using an app. And for some, it will be paying an accountant to deal with it. So really, the best option is the one you will actually keep up with.
Final thoughts
I am not pretending I am excited about another admin change.
However, once I realised I could keep using my spreadsheet and just add a bridge to send the updates, it felt much more manageable. It stopped feeling like I was being pushed into buying expensive software I did not really want.
So I will update this in June once I have tested my own setup properly, and I will be honest if it turns out to be more fiddly than promised.