Key takeaways

  • Bridging software connects a spreadsheet to HMRC so you can file VAT returns or Income Tax updates without switching to accounting software.
  • It reads figures from defined cells or ranges and submits them through HMRC's Making Tax Digital system.
  • The data must flow from your records to the submission through digital links, with no retyping or copying and pasting.
  • It is usually the cheapest way to comply for businesses already happy with spreadsheets.
  • It does not automate bookkeeping, so it suits simple businesses better than growing ones.

Making Tax Digital requires businesses to keep records in software and send figures to HMRC through an approved connection. Bridging software exists so that businesses which already keep good records in spreadsheets do not have to move to a full accounting package to comply.

How bridging software works

  1. You keep your records in a spreadsheet, such as Excel or Google Sheets.
  2. The spreadsheet calculates the figures HMRC needs: the nine VAT return boxes, or the income and expense category totals for an Income Tax quarterly update.
  3. The bridging software reads those figures from the spreadsheet, usually from cells you map once, either directly or through an import of the file.
  4. You review the figures in the bridging software and submit them to HMRC through the MTD system.

The bridging software is the “bridge” between your spreadsheet and HMRC. It must be on HMRC’s list of compatible software for the tax you are filing.

HMRC requires an unbroken chain of digital links from your records to the submission. With bridging software that means:

  • the totals in your summary sheet must be calculated by formulas that link back to the transaction records, not typed in
  • if you use several spreadsheets, they must be linked by formulas or imports, not by copying and pasting
  • the bridging software must take the figures from the spreadsheet digitally

You can make limited manual adjustments in the return software, for example a VAT correction worked out separately, but the core figures must flow digitally.

Who it suits

Bridging software tends to suit:

  • small businesses and landlords with a modest number of transactions
  • businesses with complex or industry-specific spreadsheets they do not want to give up
  • accountants who prepare clients’ figures in their own spreadsheets
  • partly exempt or unusual VAT positions that are easier to model in a spreadsheet

It suits less well:

  • businesses with many transactions, where bank feeds and automatic categorisation save time
  • businesses that also want invoicing, payroll or real-time reporting
  • anyone not confident with spreadsheet formulas, where errors in links can go unnoticed

Costs

Bridging software is generally cheaper than a full accounting package, with some free options and others charging a modest annual or per-return fee. Check whether the price covers VAT only, Income Tax only, or both, and how many businesses or returns are included.

Bridging software for VAT and Income Tax

  • VAT: bridging tools have been widely used since MTD for VAT began in 2019. They submit the nine-box return each period. See Making Tax Digital for VAT.
  • Income Tax: bridging tools for MTD for Income Tax submit quarterly updates and, in some cases, the year-end tax return. Some only handle the quarterly updates, so you may need other software to file the return. Check before you choose. See MTD software requirements.

Good practice for spreadsheet users

  • Use a consistent template with fixed categories and formulas, and protect the formula cells.
  • Keep each period’s data in the same structure so the bridging software’s mapping stays correct.
  • Reconcile the spreadsheet to your bank statements before each submission.
  • Keep a copy of the spreadsheet as submitted, as part of your records.
  • Review the digital record keeping rules so every link in the chain complies.

Frequently asked questions

What is MTD bridging software?

Software that reads figures from your spreadsheet and submits them to HMRC under Making Tax Digital, so you can keep using spreadsheets for your records.

Is bridging software allowed for VAT?

Yes, provided it is on HMRC’s list of compatible software and your spreadsheet uses digital links throughout.

Can I use bridging software for MTD for Income Tax?

Yes. Several products send Income Tax quarterly updates from spreadsheets. Check whether they also file the year-end tax return.

Do I still need to keep digital records with bridging software?

Yes. The spreadsheet is your digital record, so every transaction must be recorded in it and linked to the totals digitally.

Sources

Rates, thresholds and rules in this guide were checked against HMRC and GOV.UK guidance in October 2026. Tax rules change, so check the current position on GOV.UK or with a qualified adviser before acting. This guide is general information, not personal advice.