MTD bridging software connects a client’s existing spreadsheet to HMRC so quarterly updates, and with some products the tax return, can be sent without moving to full accounting software. It suits clients with simple, well-kept spreadsheets and few transactions. The spreadsheet must be digitally linked to the bridging product: no retyping or copying and pasting figures.
Whether MTD bridging software is the right answer depends on the client more than the product. A landlord with one property and a tidy spreadsheet may never need anything else; a sole trader with hundreds of card transactions a month will spend more time maintaining the spreadsheet than a bank feed would take. The decision matrix below helps practices sort their MTD for Income Tax clients.
Key points
- HMRC describes software that connects to records kept in spreadsheets or other tools as “bridging software” (GOV.UK: choose the right software).
- Some bridging products send quarterly updates only; others also submit the tax return. Check before choosing.
- Records must be digitally linked between products. Retyping figures or copying and pasting is not allowed.
- Only one product can be used for each separate submission to HMRC.
- Clients with qualifying income over £50,000 joined MTD from 6 April 2026; over £30,000 join from 6 April 2027 (GOV.UK: check if you’re eligible).
What MTD bridging software does
Under MTD for Income Tax, the client or their agent must use software to create digital records of self-employment and property income and expenses, send quarterly updates and submit the tax return by 31 January after the year end. GOV.UK describes two types of software: products that create the digital records themselves (through bank feeds, receipt scanning or manual entry), and products that connect to existing records such as spreadsheets. The second type is MTD bridging software.
In practice, the bridging product reads the category totals from the spreadsheet, either by mapping cells, through an add-in or by importing a file, and sends them to HMRC through its API. The spreadsheet remains where the transactions are recorded; the bridging product handles the submission.
Quarterly updates only, or the full year
GOV.UK notes that only some bridging products let you both send quarterly updates and submit the tax return. If a product only does quarterly updates, you need a second product for the return. That is allowed, but HMRC says the products must work together to meet all the requirements, and you can only use one product for each separate submission. A landlord, for example, cannot send property quarterly updates from two different products.
Digital links and spreadsheets
The digital links rule is the part that decides whether a spreadsheet setup is compliant. If the client uses more than one product, the record-keeping software and the submitting software must be digitally linked (GOV.UK: create digital records). Once a digital record is created, it must not be moved manually, meaning no writing figures into another cell or product and no cut and paste or copy and paste.
| Method | Digital link? |
|---|---|
| Formula in one sheet that mirrors a linked cell in another | Yes |
| Emailing a spreadsheet so the data can be imported into another product | Yes |
| XML or CSV export and import; downloading and uploading files | Yes |
| Automated data transfer or API transfer | Yes |
| Passing data on a memory stick for import into other software | Yes |
| Retyping totals from one sheet into another | No |
| Copying and pasting figures between sheets or products | No |
Some links are not needed. GOV.UK says you do not need to link records of other income such as dividends or savings, software that does not create self-employment or property records (such as a booking system or till), or software used only to submit the tax return, because that product takes the data directly from HMRC.
Corrections
If an error is found in a spreadsheet record, correct it in the spreadsheet and then digitally link the records to the bridging software again, so the correction flows into the next cumulative update. Changing the figure only inside the MTD bridging software would leave the spreadsheet and the submissions out of step.
Clients who suit bridging
The matrix below is a practical starting point. It is our suggestion for sorting clients, and the final choice depends on each client’s records and how much support you provide.
| Client profile | MTD bridging software | Full software |
|---|---|---|
| Landlord, one or two properties, rent paid monthly | Good fit | Optional |
| Sole trader, under about 30 transactions a month, already keeps a tidy spreadsheet | Good fit | Optional |
| Client who refuses to change and whose spreadsheet the practice already maintains | Good fit if the practice controls the template | Better long term |
| Sole trader with frequent card transactions or several bank accounts | Poor fit | Good fit, with bank feeds |
| Client with stock, debtors or VAT | Poor fit | Good fit |
| Several businesses or a mix of trade and property | Possible, one record set per business | Usually easier |
| Client whose spreadsheet is inconsistent from month to month | Poor fit | Good fit |
Clients joining from April 2027 under the £30,000 threshold will include many small landlords and part-time traders, which is exactly the group for whom MTD bridging software often makes sense. Our MTD client onboarding checklist covers sign-up for that cohort.
Clients who need full software
Full software that creates digital records is usually the better choice once transaction volume or complexity rises. Bank feeds remove most of the data entry, and the same product handles quarterly updates and the return. GOV.UK points out that VAT-registered businesses already use software for MTD for VAT and should check whether it also works for MTD for Income Tax.
Watch for warning signs that a bridging setup is costing more than it saves: the practice is rebuilding the spreadsheet every quarter, categories change from month to month, or the client’s formulas have broken. At that point, moving to full software before the next update is usually cheaper than another quarter of repair work. If you take that route, our time audit on bank reconciliation outsourcing shows where feed-based bookkeeping saves hours.
Practice workflow with MTD bridging software
A repeatable process stops spreadsheets drifting. Give every bridging client the same practice template, locked where possible, with HMRC’s categories built in.
- Issue the practice template at sign-up, with one tab per business and fixed category columns.
- Agree how the client sends it: shared folder, upload link or email, which counts as a digital link when the file is imported.
- After each quarter, check the spreadsheet for missing months, uncategorised entries and broken formulas.
- Query gaps with the client in writing and record the answers.
- Import or link the file into the MTD bridging software; never retype totals.
- Reviewer compares the totals with the previous quarter and approves.
- Submit under the practice’s agent credentials and save the confirmation.
Each update is due by the 7th of the month after the quarter ends; see our MTD quarterly deadlines calendar. For background on the wider regime, read our guide to MTD for ITSA.
Choosing MTD bridging software: criteria
Start with HMRC’s software finder, which lists products that have been through HMRC’s recognition process. HMRC does not recommend any product. Then check each candidate against this list, drawn from GOV.UK’s guidance on choosing software.
- Coverage: supports self-employment and property income, and every income source the client has.
- Submissions: sends quarterly updates and, ideally, the tax return, including other income such as savings or dividends.
- Periods: works with standard or calendar update periods as the client needs.
- Agents: supports agent access, and multiple agents where a client has more than one.
- HMRC Assist: GOV.UK suggests checking for this feature, which flags possible errors using HMRC’s data.
- Import method: cell mapping, add-in or file import, and whether it works with Excel and Google Sheets.
- Price and limits: free products exist for simple affairs but may cap transactions or features.
- Bulk handling: for practices, a single dashboard across many clients.
FAQs
Can I use Excel for MTD for Income Tax?
Yes, if the spreadsheet is used with MTD bridging software that is recognised by HMRC. The spreadsheet holds the digital records and the bridging product sends the quarterly updates. Data must move between them through a digital link such as a linked cell, file import or API, with no retyping or copying and pasting of figures.
Is MTD bridging software enough for the tax return?
Only if the product supports it. GOV.UK says some bridging products let you send quarterly updates and submit the tax return, while others only handle the updates. If yours does not file the return, use a second recognised product for it; HMRC allows different products for different tasks as long as they work together.
Is copy and paste a digital link?
No. GOV.UK says that once a digital record is created you must not move it manually, which includes cut and paste, copy and paste, and writing figures into another cell or product. Linked cells, file imports and exports, and API transfers are acceptable digital links.
Do landlords need bridging software for MTD?
A landlord needs software that works with MTD for Income Tax. If they keep property records in a spreadsheet, MTD bridging software lets them keep doing so while meeting the submission rules. Landlords with one or two properties and simple monthly rent are often the clients for whom bridging works best.
How do I find HMRC-recognised bridging software?
Use HMRC’s software finder tool, linked from the GOV.UK guidance on choosing MTD software. It asks a few questions and returns products that have been through HMRC’s recognition process. HMRC does not recommend any product, so test the import method with a real client spreadsheet before committing.
Get spreadsheet clients ready for each quarter
Our team checks client spreadsheets, chases gaps and prepares MTD updates in your chosen software for your review and submission. See our MTD-ready reporting service or book a consultation.
