What is bridging software for MTD?

What it does

MTD for Income Tax needs digital records and quarterly updates sent to HMRC through compatible software. If you already keep your income and expenses in Excel or Google Sheets, bridging software sits between that spreadsheet and HMRC: it reads the summary figures, lets you check them, and submits the update for you. Full accounting software does the same job but also holds your records itself.

How it works with a spreadsheet

1. Keep your records in the spreadsheet with one row per transaction: date, description, amount and category.
2. Add up each category for the update period. Our MTD Spreadsheet Maker builds a sheet that does this for you.
3. Connect the bridging software to HMRC (you authorise it once with your Government Gateway details on HMRC’s own sign-in page) and point it at the spreadsheet.
4. Check the figures and submit. The software sends the quarterly update and keeps a record of what was sent.

The spreadsheet itself is the digital record, so it must stay a real file you keep, with no retyping of numbers by hand between the sheet and the software.

What to look for

• It is on HMRC’s list. Only use a product listed as compatible on GOV.UK. Altto does not endorse any product and does not copy the list, because it changes.
• It covers your income. Check that it supports self-employment, property, or both, depending on what you have.
• It covers more than quarterly updates. Check whether it also handles the end-of-year final declaration, or whether you would need something else for that.
• It works with your spreadsheet. Excel file, Google Sheets, or a fixed template? Some tools only read their own layout.
• The cost. Prices and free tiers differ and change, so check the provider’s own page rather than a comparison site.
• Who holds your data. Bridging software needs your figures and your HMRC authorisation. Read the provider’s privacy policy first.

Bridging software or accounting software?

If you are happy with a spreadsheet and your records are simple, bridging software keeps what you already do. If you would rather have bank feeds, receipts and invoices in one place, accounting software that supports MTD may be less work. Either route is valid as long as the product is recognised by HMRC.

What Altto does and does not do

The MTD Spreadsheet Maker makes the spreadsheet: income and expense records with quarterly totals, built in your browser with nothing uploaded. It is not bridging software and cannot send anything to HMRC. To check whether and when MTD applies to you, use the MTD checker. The next deadline is covered in the 7 November quarterly update guide.

Where to check the official position

HMRC’s list is on GOV.UK: search for “Find software that works with Making Tax Digital for Income Tax”. Rules and deadlines can change, so confirm them there before you buy anything. This guide is general information, not tax advice.

Product names are trademarks of their owners. Altto is not affiliated with HMRC or any software company named.