How it works
A spreadsheet can't talk to HMRC directly. Bridging software reads the totals from your spreadsheet and sends your quarterly updates through HMRC's system. You keep your records exactly where they are.
Digital links
If you use more than one product, the data has to move between them through a digital link. Formulas linking cells, importing or exporting a file (such as CSV), and automatic transfers all count. Retyping figures, or copying and pasting them between programs, doesn't.
Choosing bridging software
GOV.UK has a tool to find software that's compatible with MTD for Income Tax, which you can filter for bridging and free options. Before you choose, check:
- It covers all your income types (self-employment, UK property, and foreign property).
- It handles the final declaration as well as quarterly updates, or you have something that does.
- It can read your spreadsheet in a way that counts as a digital link.
- What it costs after any free period.
What a good MTD spreadsheet needs
HMRC's categories, cumulative totals from 6 April, and one fixed place for your bridging software to read from. The MTD Record Keeper adds bank statement import, joint-ownership shares, mileage, a tax estimate, and error checks.
Questions
Is a spreadsheet allowed under MTD?
Yes, as long as it's digitally linked to MTD-compatible software that sends your updates.
Is there free bridging software?
Yes. Some MTD-compatible products are free, at least for simple cases. GOV.UK's software finder lets you filter for them.
Get ready properly: the MTD Starter Kit (£7.99) gives you the full Plain-English Guide and the spreadsheet that does the quarterly sums.
General information, not tax advice. Not affiliated with HMRC.