Bridging Software for Making Tax Digital: Keep Your Spreadsheets or Move On?

Bridging software for Making Tax Digital is a small program that reads the totals from the spreadsheet you already keep and sends them to HMRC. HMRC calls it software that "connects to your records". For Making Tax Digital (MTD) for Income Tax, it sends your quarterly updates and, if the product supports it, your tax return. So you can keep your spreadsheet. The catch is that the spreadsheet has to follow HMRC's digital record rules, and the bridging product has to handle everything you file.

If your records are tidy, you have one or two income sources, and you're happy in Excel or Google Sheets, bridging software is usually the cheapest and least disruptive way to comply. If your spreadsheet has turned into the system that runs your bookings, jobs, or sales, it may be time for something better. This guide explains how to decide, with the rules taken from GOV.UK (checked November 2026).

This is a general guide, not tax advice. For your own situation, check GOV.UK or ask your accountant.

Who has to use Making Tax Digital for Income Tax, and when

MTD for Income Tax applies to sole traders and landlords registered for Self Assessment once their qualifying income passes a threshold. Qualifying income means gross self-employment and property income, before expenses. According to HMRC's eligibility guidance, the start dates are:

Qualifying income in tax year	Over	You must use MTD from
2024 to 2025	£50,000	6 April 2026 (already started)
2025 to 2026	£30,000	6 April 2027
2026 to 2027	£20,000	6 April 2028

On 5 October 2026 HMRC urged sole traders and landlords earning more than £30,000 to act now. It estimates that around 1,077,000 more people will need to join from April 2027, and it suggests signing up early and choosing software in advance. Some people are exempt, for example because of digital exclusion. The eligibility page links to the exemption rules.

What bridging software does (and what it doesn't)

HMRC's guide to choosing software for Making Tax Digital for Income Tax describes two kinds of compatible software:

1. Software that creates digital records. This is full record-keeping or accounting software. You link a bank feed, scan receipts, or type in income and expenses.
2. Software that connects to your records, often called bridging software. It links to records you already keep, such as a spreadsheet, and makes the submissions to HMRC.

In practice, a bridging tool:

• reads the income and expense totals from your spreadsheet, usually from cells you map once to HMRC's categories
• sends each quarterly update, which is a summary of category totals and not individual receipts (HMRC: send quarterly updates)
• in many products, also submits the end-of-year tax return.

What it doesn't do: it won't keep your books, categorise transactions, reconcile your bank, chase invoices, or catch mistakes in your spreadsheet. If a formula is wrong, the bridging tool sends the wrong number.

Check that it files the tax return too

HMRC says your software must let you "send quarterly updates and submit your tax return", and that you can only use one product for each separate submission. Not every product listed does both yet, and coverage of income types varies. Before you pay, check that the product covers your income types (self-employment, UK property, foreign property) and the full tax return, not just the quarterly updates.

Your spreadsheet still has to follow the digital record rules

Bridging software doesn't excuse a messy spreadsheet. HMRC's page on creating digital records sets out what the records must contain:

• For every transaction: the amount, the date, and a category that matches the Self Assessment categories.
• One record per income or expense, stored in software. A spreadsheet counts.
• Digital links all the way through. Linked cells, CSV or XML import and export, and API transfers are accepted. After a record has been sent to HMRC, you must not move it manually: no retyping it into another cell or app, and no copy-and-paste.
• Keep the originals. Invoices and bank statements still matter, and digital records must be kept for at least 5 years after the 31 January deadline for that tax year.

That copy-and-paste rule catches a lot of spreadsheet users. If you build your figures by pasting from a booking app, an invoicing tool, or a bank export into a "tax" tab, that workflow needs a digital link instead.

Bridging software vs accounting software vs an internal tool

There are three realistic setups for a small business:

Option	How it works	Suits	Watch out for
Spreadsheet + bridging software	You keep records in Excel or Google Sheets, and the bridging tool sends the totals	One trade or one or two properties, simple records, comfortable with spreadsheets	Formula errors, the no-copy-paste rule, and whether the product also files the tax return
Full MTD accounting software	Bank feeds, receipt capture, and categorising, with filing built in	Many transactions, VAT as well, or you want your accountant in the same system	Monthly fees, and changing how you work
Your own operations tool + MTD software	Bookings, jobs, or sales live in a tool built for your business, which exports clean records to your MTD software	Businesses whose spreadsheet is really their operations system	Up-front scoping, and it's not tax software, so you still need a compatible MTD product to file

HMRC doesn't recommend any product. To see what's recognised, use HMRC's software finder. It asks a few questions and gives you a personalised list, and you can also search for software you already use. HMRC says free products exist for simple tax affairs, but they may have limits. The ICAEW's list of MTD for Income Tax software providers groups the products into bridging, record-keeping, and full-service options.

How to choose MTD bridging software: a checklist

• It appears in HMRC's software finder for MTD for Income Tax (being listed for VAT isn't enough).
• It sends quarterly updates and submits the tax return for your income types.
• It works with your spreadsheet: Excel, Google Sheets, or a CSV export, and on a Mac if you use one.
• It handles more than one business, or both a trade and property income, if you have them.
• Your accountant can get access, or file for you, if you use one.
• You understand the pricing (per submission, per year, or free with limits) and what happens when you hit a limit.
• It shows your totals before you submit, so you can check them.
• You can export what you've sent, for your 5-year records.

Deadlines to put in the diary

With the standard update periods, each quarterly update covers the year to date from 6 April. The deadlines are 7 August, 7 November, 7 February, and 7 May (HMRC). If you're in the first group, your second update is due on 7 November 2026. For the 2026 to 2027 tax year, HMRC says late quarterly updates don't earn penalty points, but late tax returns still do. From the following year, each late update earns a point, and 4 points bring a £200 penalty.

Keep your spreadsheets, or move on?

Keep the spreadsheet and add bridging software if:

• your spreadsheet only exists to track income and expenses
• you have tens of transactions a month, not hundreds
• the figures go into one sheet without copying between files
• you or your bookkeeper are comfortable keeping it accurate.

Move to full accounting software if:

• most of your income and costs go through a business bank account (bank feeds save the typing)
• you're VAT-registered, or about to be, and want one place for both
• you spend more time fixing the spreadsheet than running the business.

Think about a proper internal tool if your spreadsheet is really your business system:

• it holds bookings, jobs, quotes, stock, or tenancies, and the tax figures are pulled out of it by hand
• several people edit it, and versions or errors creep in
• you copy data from it into invoices, your accounting software, or HMRC's categories every month.

In that case, the copy-and-paste habit is the real problem, and it costs you time all year, not just at tax time. A tool built around how you work can record each job or sale once, with the date, amount, and category, and export clean data to the MTD software or accountant you choose. You still need HMRC-recognised software, or your accountant, to file. The tool just makes the records reliable. If you're weighing this up, our guide to when bespoke software pays off for a UK small business goes into the trade-offs, and our inventory management guide covers the same question for stock.

Having an internal tool built for you

Buildly designs, builds, hosts, and maintains internal business tools that replace spreadsheets and manual steps. Buildly is not tax software and doesn't file with HMRC. It builds the system where your day-to-day records live, which can then export to your MTD product.

• Scoping is free. You send a brief and get a written scope and price. You approve each stage: scope, wireframes, design, build, and launch (how it works).
• Plans are monthly subscriptions. A small, single-purpose tool fits Essential, at a $35/month launch price (regular price $60). Subscribers keep $35 for as long as they stay subscribed. There's a $100 setup fee, and the initial build costs nothing extra. Tools with sign-in, dashboards, and reports, or several roles and approvals, fit the larger plans. See pricing for those.
• Hosting and maintenance are included. Standard integrations are a one-time $20 add-on each, and your written scope says which apply.

If you're facing the April 2027 or April 2028 start, do it in this order. First, choose and test your MTD software well before your first quarterly update. Then, separately, decide whether the spreadsheet behind it deserves an upgrade. For the next change after MTD, see our guide to e-invoicing in the UK and the 2029 mandate.