If you have been tracking your income and expenses in a spreadsheet for years, Making Tax Digital (MTD) for Income Tax does not force you to abandon it. Bridging software offers a compliant route: it acts as the digital link between your existing records and HMRC's systems, extracting the figures you have already prepared and submitting them as quarterly updates. This guide explains exactly how it works, what HMRC requires, and whether it is the right choice for you.
KEY TAKEAWAYS
Bridging software keeps your existing spreadsheet compliant with MTD by reading your income and expense figures and submitting them to HMRC digitally, so you do not have to switch to full accounting software.
It acts as a digital link between your existing spreadsheet and HMRC's MTD API, transmitting your quarterly income and expense summaries without requiring you to change how you keep records.
HMRC's digital link rules must be followed: no manual retyping or copy-pasting of records once they have been created. Formulas referencing between spreadsheet tabs, CSV exports and API transfers all count as valid digital links.
Your records must be complete and accurate before submission. Bridging software submits what is in your spreadsheet; it does not validate or correct your underlying data.
Bridging software is most appropriate for those with well organised spreadsheets and straightforward tax affairs. Those with complex records or multiple income sources will find full accounting software, such as RentalBux, a better fit.
What Is MTD Bridging Software?
Bridging software is a tool that sits between your existing record-keeping system, typically a spreadsheet such as Microsoft Excel or Google Sheets, and HMRC's Making Tax Digital (MTD) platform.
The software acts as a digital connector: it reads the income and expense summary figures from your records and submits them to HMRC via the official MTD application programming interface (API), without requiring you to change the way you keep your books.
Think of it as a translator. You continue working in the spreadsheet. The bridging software handles the digital link to HMRC, the part a spreadsheet alone cannot do, because spreadsheets have no built-in API connectivity to HMRC's systems.
HMRC refers to this category as 'software that connects to your records', as opposed to software that creates digital records from scratch. Both are valid under MTD for Income Tax. All bridging software on HMRC's software finder has been through HMRC's recognition process; HMRC does not endorse any individual product.
Key point: HMRC does not require you to use full accounting software for MTD for Income Tax. Bridging software that has passed HMRC's recognition process fully satisfies the digital link requirement.
Why Spreadsheets Alone Do Not Meet MTD Requirements
Spreadsheets are the most widely used bookkeeping tool among self-employed individuals and small landlords in the UK. They are flexible, familiar, and free. So why can't you simply email HMRC a CSV at the end of each quarter?
The answer lies in the digital link requirement. Under MTD for Income Tax, data must flow from your records to HMRC electronically, without manual re-entry at any stage in the chain.
A spreadsheet on its own:
Has no direct connection to HMRC's MTD API
Cannot authenticate against HMRC's systems on your behalf
Does not produce the structured data submission format that HMRC requires
Cannot satisfy the requirement that no data be manually retyped or copy-pasted between submission stages
The digital link requirement is explicit: once a digital record has been created and sent to HMRC in a quarterly update, you must not manually move that record by writing it out in another cell or in other software, and you cannot use cut and paste or copy and paste to move it.
Bridging software solves this by creating an automatic, electronic transfer that satisfies HMRC's rules.
What HMRC Requires From Digital Links
Several transfer methods satisfy the digital link requirement. For bridging software users, the following all count as valid digital links:
Linked cells in spreadsheets, for example a formula in a summary tab that references cells in a transaction log tab
CSV import and export: exporting your spreadsheet as a CSV file and importing it into the bridging tool
XML import and export: structured data exchange between systems
Emailing a spreadsheet containing digital records so the data can be imported into another software product
Transferring via portable device, such as copying records onto a USB drive and importing into bridging software on another machine
API transfer: automated, direct submission via the HMRC MTD API, the method bridging software uses for the final submission step
A formula referencing between two spreadsheet tabs does meet the requirement, because the data flows electronically.
How Bridging Software Works: Step by Step
The process of using bridging software for MTD for Income Tax follows a consistent pattern, regardless of which product you choose:
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Important: The quarterly update is a summary of income and expenses. It is not a tax return, and you are not paying tax at the quarterly stage. Payments on Account dates remain unchanged: 31 January and 31 July.
The Quarterly Submission Process in Practice
Here is a practical walkthrough of what a quarterly submission looks like using bridging software for MTD for Income Tax.
Step 1: Maintain Your Spreadsheet Throughout the Quarter
Record every transaction in your spreadsheet as it occurs during the quarter: date, amount, and category. If your bridging software uses a fixed template, enter transactions directly into that template. If it connects to your own spreadsheet, ensure your summary tab (or equivalent) will clearly show the totals HMRC needs.
Step 2: Prepare Your Quarterly Summary
Before the submission deadline, check that your income and expense totals for each MTD category are correctly calculated and visible in your spreadsheet. Review for any missing transactions, uncategorised items, or figures that look out of place. Your bridging software will submit exactly what is in your spreadsheet; it will not flag errors in your source data.
This is the single most important step: the submission is only as good as the underlying spreadsheet. Quarterly updates are due on fixed dates through the year, and your bridging software should display the relevant deadline for each period. MTD quarterly deadlines set out every submission date.
Step 3: Connect Your Spreadsheet to the Bridging Software
Open your bridging tool and connect it to your spreadsheet. Depending on the product, this involves mapping your summary cells to the correct MTD submission fields, uploading a CSV export, or simply opening the add-in within your spreadsheet. Confirm that the totals shown in the bridging software match what is in your spreadsheet exactly.
Step 4: Authorise and Submit
Once you are satisfied with the figures, authorise the submission in the bridging tool. The software will transmit the data to HMRC via the MTD API. HMRC returns a confirmation receipt, which the software will display and which you should save for your records. Your quarterly update is now complete.
Note: Quarterly updates under MTD are cumulative, also known as CY-2 rule. Each update covers the period from 6 April to the quarter-end date, not just the quarter in isolation, so errors in a previous quarter can be corrected in the next quarterly update rather than through a separate amendment process.
Year-End Finalisation and the Final Declaration
After the tax year ends on 5 April, you complete year-end finalisation and submit a Final Declaration, which replaces the annual Self Assessment tax return. This is where accounting adjustments are made, reliefs are claimed and non-MTD income such as dividends and PAYE income is reported.
For bridging software users, the practical question is coverage: your chosen product must either submit the Final Declaration itself or maintain a compliant digital link to a separate product that does.
What Records Must Your Spreadsheet Contain?
Before choosing bridging software, it is important to understand what must be in your spreadsheet. For MTD for Income Tax, you must create and store digital records of your self-employment and property income and expenses.
For each transaction, you must record:
The amount
The date the income was received or the expense incurred, using whichever basis (cash or accruals) you have adopted
The category. MTD for Income Tax uses the same income and expense categories as Self Assessment, so your spreadsheet columns should map to headings such as rent, repairs and maintenance, and professional fees for property, or turnover, cost of goods, and car and travel expenses for self-employment. MTD digital record-keeping requirements lists every category in full.
If you keep your records in Excel, our guide on setting up an Excel spreadsheet for MTD compliance will be a life saver for you.
Note
You do not need to create digital records for PAYE income, dividends, savings income, State Pension or private pensions, or your share of profit from a partnership as an individual partner. These must still be reported in your Final Declaration, but they do not need to sit in your MTD-compliant spreadsheet.
Sole Traders: Separate Records per Business
If you have more than one self-employment business, you must create separate digital records and send separate quarterly updates for each. For example, if you are both an electrician and a driving instructor, you need two sets of digital records and you submit two quarterly updates per quarter. In practice, this is the requirement I most frequently see cause confusion. People assume one spreadsheet covers everything. It does not.
Landlords: UK and Foreign Property Businesses
Your UK properties are treated collectively as one UK property business and your non-UK properties as one foreign property business. Your bridging software must be capable of handling whichever applies to you, or both if you let properties in the UK and overseas.
Jointly Let Properties
If you jointly let a property with another landlord, you only need to create digital records for your share of income and expenses, and simplified record-keeping options are available for jointly let properties.
Types of Bridging Software for MTD Income Tax
Not all bridging software works in the same way. There are three broad approaches, each with different implications for how you structure your spreadsheet.
Excel and Google Sheets Add-Ins
I first encountered this category when advising a landlord with eight years of meticulously maintained Excel records. His first question was whether MTD would force him to abandon them. It would not, and add-in bridging tools are why.
Add-in bridging tools install directly into your spreadsheet application and communicate with HMRC from within the environment you already use. The software uses an Excel add-in that reads your quarterly summary figures from designated cells and submits them to HMRC without you needing to leave Excel.
You specify which cells hold which MTD categories, and the add-in handles the API call. This approach works best if you have an existing, well organised spreadsheet you want to keep.
Template-Based Bridging Tools
Some bridging products provide their own pre-formatted spreadsheet template rather than connecting to your existing layout. You simply enter your income and expenses into their template, and built-in macros handle the submission.
This removes the need to map your own cells but means adopting a new spreadsheet structure. It is often simpler for people who do not already have an elaborate spreadsheet system.
CSV Import and Upload Portals
A third approach involves exporting your spreadsheet data as a CSV file and importing it into a standalone application or web portal, which then submits to HMRC.
This approach is not restricted to Excel users, because any spreadsheet that can export CSV is compatible. It is also suitable for users of legacy accounting desktop software that cannot submit to HMRC directly but can export data.
RentalBux as Bridging Software: |
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RentalBux is both digital record-keeping software and template-based bridging software. You download a structured Excel template, complete your income and expense records, and upload the file. RentalBux then submits your quarterly updates directly to HMRC, making it a natural fit if you maintain your records in Excel and want to stay that way. |
What Bridging Software Can and Cannot Do
This distinction matters. Bridging software is a submission tool, not an accounting tool. The accuracy of what you submit to HMRC depends entirely on the accuracy of the records in your spreadsheet. If your spreadsheet contains errors, bridging software will faithfully submit those errors to HMRC.
Bridging software can do this | Bridging software cannot do this |
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Send quarterly updates to HMRC via the MTD API | Create or categorise your digital records for you |
Submit your Final Declaration (year-end return) | Pull in bank feeds automatically |
Satisfy the digital link requirement | Track capital allowances or end-of-period adjustments automatically |
Work with your existing spreadsheet structure | Generate invoices or manage cash flow |
Handle multiple income sources if supported | Catch errors in your underlying spreadsheet figures |
Provide a confirmation receipt for submissions | Provide real-time estimated tax liability calculations (most products) |
Is Bridging Software the Right Choice for You?
HMRC's own research into how businesses choose MTD software found that familiarity with existing tools and concern about disruption to established workflows were significant factors. Bridging software directly addresses both.
It may be the right option if:
You have used spreadsheets for years and your records are accurate, well organised and categorised correctly under the MTD income and expense headings
You use legacy accounting desktop software (such as Sage 50 or an older version of QuickBooks) that cannot submit directly to HMRC under MTD for Income Tax
You have straightforward tax affairs, for example you are a landlord with a handful of properties and predictable income, or a sole trader with one business
You do not want to learn a new system and your current process is working well
Cost is a priority. Bridging tools are considerably cheaper than full cloud accounting platforms, with some available for free and others around £25 per year
Bridging software may not be the right long-term solution if:
Your records are complex or disorganised, since the quality of your submission depends on the quality of your spreadsheet
You have multiple income sources and need one product to manage everything
You want real-time financial insights, bank feeds, automated invoicing or integrated payroll
You are VAT-registered and want a single product to cover both MTD for VAT and MTD for Income Tax
Your business is growing and your records are becoming more complex, in which case full accounting software may be a better long-term investment
The clients who have stayed with bridging software long-term tend to have one thing in common: their spreadsheet was already well organised before MTD arrived. The ones who run into difficulty are those whose Excel file was always slightly chaotic.
Some expenses in one sheet, some in another, inconsistent category names. MTD does not fix a disorganised spreadsheet. It exposes it.
A sole trader who came to us in January 2026, a self-employed consultant with four years of Excel records, asked whether he had to switch software. We went through his spreadsheet together.
The categories were already roughly correct, just inconsistently named (sometimes 'travel', sometimes 'Travel costs', sometimes 'Transport'). Half a day of tidying the category names and building a summary tab, and he was MTD-ready without touching a new platform. His first quarterly update will be a ten-minute job. That is the bridging software case at its best.
A useful benchmark: if the thought of preparing four structured quarterly summaries per year from your spreadsheet feels manageable, bridging software may work well. If preparing a single annual return is already a struggle, the discipline required for quarterly submissions may make full accounting software the better option.
Need help choosing between bridging and full MTD software? If traditional bridging software is not quite the right fit, because you have growing income, multiple properties, joint ownership or foreign rental income, RentalBux goes beyond spreadsheet submissions with built-in bank feeds, automatic joint-ownership splitting, support for all three income sources, and direct HMRC submissions with no spreadsheet required. Try RentalBux free at app.rentalbux.com/register or book a walkthrough at rentalbux.com/book-demo.
Choosing Bridging Software: What to Look For
All MTD-compatible software, including bridging tools, must pass HMRC's recognition process before being listed. HMRC does not recommend any individual product, but it provides a software finder.
On the results page, filter by 'Software that connects to your records (bridging software)' to see bridging-specific options. When evaluating products from that list, check the features below.
Feature to check | Why it matters |
|---|---|
HMRC recognition | The software must appear on HMRC's list of compatible products. If it is not listed, it cannot connect to the MTD API and any submission made through it will not satisfy the digital link requirement. |
Compatibility with your spreadsheet | Confirm the tool works with the exact version you use. Some bridging tools are built for Microsoft 365, Excel Online, Google Sheets or LibreOffice, others work only with desktop Excel, and a smaller number support both. A mismatch may mean the software cannot read your workbook accurately. |
How the software maps to your spreadsheet | Bridging software pulls your income and expense figures by mapping to specific cells or named ranges. The question is how flexible that mapping is. If you record each property on a separate tab, or list properties as rows in a single master sheet, the tool needs to accommodate your layout. |
Multiple property support | HMRC requires income and expenses to be reported at the property level. If you own more than one rental property, confirm the tool maps and submits figures for each property individually. |
Income source coverage | If you have income beyond UK rental property, such as a sole trade or foreign property, check that the software supports every source you need to report. |
Quarterly updates and the Final Declaration | MTD for Income Tax requires four quarterly updates and a Final Declaration each tax year, the latter being the year-end submission that replaces Self Assessment. Some tools handle the quarterly updates but treat the Final Declaration separately, or not at all. Confirm the software covers the full annual cycle. |
Accounting period support | Check the tool supports standard tax year quarters, and calendar quarters if you have elected to report on those dates. |
Multiple agent access | If both you and your accountant need to be authorised to view or submit, confirm the software allows more than one agent. |
HMRC Assist integration | This HMRC feature gives real-time feedback and flags errors before submission. Check whether your chosen software includes it. |
Support and ongoing updates | MTD rules are still developing, so confirm the provider is actively maintaining the software rather than leaving it static. |
Cost and transaction limits | Most bridging software is sold on an annual subscription, so this becomes a recurring cost if you continue using Excel. Some free or lower-tier products cap the number of transactions, so check the limit suits your volume. Pricing changes frequently, so verify current figures directly with each provider. |
Work through these points against the shortlist from HMRC's software finder, and you will be able to settle on a tool that fits both your spreadsheet and your reporting obligations.
Using More Than One Software Product
MTD for Income Tax permits you to use more than one software product, subject to an important rule: you can only use one product for each separate submission you need to make to HMRC.
This means, for example:
You can use bridging software to send your quarterly updates for your property business and a different product to send quarterly updates for your sole trader business, one product per submission type per income source
You cannot use two different bridging tools to submit the same set of quarterly updates for the same income source
You can use bridging software for quarterly updates and separate tax return software for your Final Declaration, provided the two products can work together and there is a compliant digital link between them
If you have more than one income source and want to use a separate product for each, make sure all products support the income source they need to cover, and that together they meet all your MTD obligations.
Important
If you use more than one software product, for example bridging software for quarterly updates and a separate product for your Final Declaration, you must ensure the two products can work together and that the digital link between them is maintained.
What Happens if Your Circumstances Change?
You can notify changes in circumstances online through your MTD software, and most changes are handled within the regime rather than by leaving it. Our full guide on MTD for Income Tax covers mandation thresholds, exemptions and digital exclusion in full.
For bridging software users specifically, two changes matter most:
Adding a new income source. Check that your bridging software supports the new source before the submission in which it first appears. A tool that handles UK property only will not cover a new self-employment.
Changing your software. If you switch from one bridging tool to another, or upgrade to a full accounting platform as your income grows, ensure the digital link between your records and HMRC is maintained throughout and that no records are manually re-entered during the transition. Check whether your provider lets you carry your submission history across.
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