Are you still managing your business finances on spreadsheets? You are not the only one. But with Making Tax Digital expanding, this method is becoming harder to maintain.
From 6 April 2026, sole traders and landlords have already used HMRC-compliant software to report income under MTD for Income Tax. Spreadsheets alone will no longer be enough.
Bridging software lets you stay MTD-compliant while connecting your existing spreadsheets directly to HMRC’s systems. In this guide, we’ll explain details about MTD bridging software.
What is MTD Bridging Software?
Making Tax Digital (MTD) bridging software is a digital tool that links your existing financial records to HMRC’s tax system. It works as a bridge between business spreadsheets or other accounting tools and the HMRC platform for VAT & tax via a link.
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This software is simpler than full cloud-based accounting software. An MTD software is designed using HMRC’s application programming interfaces (APIs) to fulfil HMRC requirements for MTD. So, it can only send your quarterly updates and submit tax returns to HMRC. But you can not make.
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On the other hand, accounting software integrates a business’s bookkeeping, invoicing, and financial reporting into a single system. It also helps you prepare and file your quarterly updates and tax & VAT returns to meet MTD. Â
Which Features Should Your Software Have?
MTD bridging software is important to meet MTD compliance. You, or an agent on your behalf, will need to use MTD-compatible commercial software. Please consider certain features when choosing MTD bridging software. According to HMRC, after choosing the software, check that it has all the features you need.
- can create, store and correct digital records of your self-employment and property income and expenses
- make summaries of your sole trades, property income and expenses from the spreadsheets to send your quarterly updates to HMRC
- can connect your manual documents to HMRC through a digital link for all compliance tasks and MTD submissions
- allow you to report all your other income sources to complete your tax return
- work with your accounting period, such as a standard tax year or calendar update periods
When Do You Need to Use MTD Bridging Software?
From 6 April 2026, sole traders and landlords earning over £50,000 must use MTD bridging software to report their income using Making Tax Digital for Income Tax.
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And, £30,000 for the 2025 to 2026 tax year, you will need to use it from 6 April 2027. If your qualifying income is over £20,000 for the 2026 to 2027 tax year, you will need to use it from 6 April 2028.
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Also, from 2019, all VAT registered business must use MTD bridging software.
Types of MTD Bridging Software
There are different types of bridging software to help you use Making Tax Digital for Income Tax. Choose a software which can create digital records and connect to your existing records.
Some software lets you create your own self-employment and property digital records. They handle this by linking your business bank account or scanning receipts and invoices. You can send quarterly updates and submit your tax return by using this MTD bridging software. They make a bridge through a digital link between your business and HMRC.
Again, some software creates digital records and also lets you connect to your existing records in spreadsheets or other cloud-based accounting tools. If you want, you can choose more than one software. But you can only use one product for each separate submission to HMRC if you are only a landlord.
However, you or your agent can use more than one software if you have multiple income sources. For example, you’re a builder and a landlord. You can use more than one; one for creating records and sending your quarterly updates. And another for submitting your tax return.
ProTips:Â Use HMRC-approved single MTD bridging software to meet all your Making Tax Digital for Income Tax requirements.
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How TAJ Accountants Will Help You?
Making Tax Digital isn’t going anywhere — and if your current system isn’t MTD-compliant, now is the time to act.
At TAJ Accountants, we’ve supported hundreds of SMEs, landlords, and sole traders across London with smooth, stress-free MTD compliance. No confusion, no last-minute scrambling, and no unnecessary risk of HMRC penalties.
Here’s how we help:
- We review your current accounting setup and advise whether bridging software is enough or if you need a fully MTD-compatible platform
- If necessary, we configure bridging software that connects your existing spreadsheets directly with HMRC systems — without forcing you to change how you work
- Our experts manage your MTD VAT and Income Tax submissions accurately and on time, giving you complete peace of mind
- We keep you informed as MTD requirements continue to expand, so you’re always prepared for upcoming changes
- You’ll have a dedicated accountant who understands your business and ensures your compliance remains fully secure and up to date
- We set you up on QuickBooks or Xero, so your bookkeeping, records, and submissions are all managed in one place
MTD compliance feels overwhelming when you try to handle it alone. Contact with TAJ Accountants, you don’t have to.
Conclusion
Making Tax Digital is no longer a future requirement — it’s already here, and the rules continue to expand. Businesses that aren’t prepared risk falling behind and facing unnecessary HMRC issues.
While bridging software helps in the short term, the most successful SMEs use MTD as an opportunity to improve their financial systems, maintain accurate records, and gain better visibility over their numbers.
As trusted small business accountants in London, TAJ Accountants, we simplify the entire MTD process for London businesses — from software setup to live HMRC submissions — so you stay compliant without the stress. Get in touch today, and let’s make sure your business is fully prepared for Making Tax Digital.
