MTD Bridging Software for Excel: Keep Your Spreadsheet
Last updated 24 June 2026 · 10 min read · By the LandlordTaxAi Editorial Team
The short answer
You can keep using Excel under Making Tax Digital for Income Tax — but only if you pair it with HMRC-recognised bridging software that creates a digital link. The spreadsheet holds your records; the bridging tool sends your quarterly totals to HMRC. The one thing you must not do is type figures into HMRC by hand — that breaks the digital-link rule.
Plenty of landlords have run their lettings from one trusty spreadsheet for years, and the good news is they do not have to abandon it. HMRC permits spreadsheets under MTD — the catch is the digital link. This guide explains how bridging software plugs the gap between Excel and HMRC, how a quarter actually gets filed, and where the route goes wrong. If you are still deciding whether to keep the spreadsheet at all, see moving from a spreadsheet to MTD.
How bridging software works
Bridging software is a small program that sits between your spreadsheet and HMRC. It reads the category totals from your sheet and submits them as your MTD quarterly update — without you re-typing a single figure. Think of it as a translator: your Excel speaks “rows and formulas”, HMRC speaks “API”, and the bridging tool carries the message intact.
The legal heart of it is the digital link: data must move from spreadsheet to HMRC automatically. A linked cell reference is fine. Copy-paste, retyping, or reading a number off one screen into another is not — and breaks the rules even if the final figure is correct.
Filing a quarter, step by step
- 1
Keep your records in a structured spreadsheet
Record every rental transaction in Excel (or Google Sheets exported to Excel) with consistent columns — date, description, amount, property and HMRC category. The figures must be captured digitally, not copied from paper at year end.
- 2
Total your income and expenses by category
Use formulas to total each SA105-style category per quarter — rents received, repairs, agent fees, insurance and so on, with residential mortgage interest kept separate. Bridging software submits these category totals, so they must be right.
- 3
Connect HMRC-recognised bridging software
Choose bridging software from HMRC's recognised list and link it to your spreadsheet. The link must be a 'digital link' — the data flows automatically, with no manual retyping between the spreadsheet and the filing tool.
- 4
Submit your quarterly update
At the end of each quarter, the bridging software reads your totals and sends the quarterly update to HMRC, typically within one month of the quarter end. You review the figures before they go.
- 5
Finalise with the end-of-period statement and declaration
After the fourth quarter, make any adjustments, submit the final declaration through compatible software, and pay your tax. The spreadsheet stays your book of record throughout.
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Rental profit & tax calculator
Estimate the tax on your rental income for 2026/27
Result
- Taxable profit (rent − expenses)
- £11,200
- Income Tax at 40%
- £4,480
- Less mortgage interest credit (20%)
- − £1,000
- Tax due on this property
- £3,480
- Income after tax
- £7,720
Estimate based on verified 2026/27 UK rates. Informational only — not personal tax advice.
Tired of maintaining formulas?
LandlordTaxAi imports your bank transactions, categorises them against HMRC’s SA105 categories automatically, and files your quarterly updates — no spreadsheet, no bridging tool, no broken formulas.
See how it worksBridging vs all-in-one: an honest comparison
| Excel + bridging | All-in-one software | |
|---|---|---|
| Data entry | Manual, by you | Imported from bank feed |
| Categorisation | You decide each row | Automated, you review |
| Cost | Often the cheapest | Small monthly fee |
| Best for | Confident Excel users, simple portfolios | Anyone who wants to save time and reduce errors |
There is no universally “right” choice — only the right one for your habits. If your spreadsheet is solid and your records are simple, bridging keeps your costs down. If you dread the quarterly data entry or your portfolio is growing, the time saved by all-in-one software quickly outweighs the fee.
Frequently asked questions
Can I still use Excel under Making Tax Digital?
Yes. HMRC explicitly allows spreadsheets for MTD for Income Tax, provided you combine them with bridging software that creates a digital link to HMRC. The spreadsheet keeps your digital records; the bridging tool turns your category totals into the quarterly submission. What you cannot do is type figures from a spreadsheet into HMRC by hand — that breaks the digital-link rule.
What is a 'digital link'?
A digital link is an automated transfer of data between programs with no manual re-keying. Linking your spreadsheet cells to bridging software so the figures flow across automatically is a digital link. Copy-pasting, retyping, or reading a number off one screen and entering it into another is not. The digital link rule exists so the audit trail from record to submission stays unbroken.
Is bridging software for Excel free?
Some bridging tools are low-cost and a few have free or pay-per-submission options, but most charge a small annual fee. The spreadsheet itself can be free; the bridging step is what you usually pay for. Always check the tool is on HMRC's recognised MTD for Income Tax software list before relying on it.
What's the risk of the spreadsheet-plus-bridging route?
The spreadsheet is only as good as your discipline. A broken formula, a transaction logged twice, mortgage interest dropped into the wrong column, or a missed quarter all flow straight through to HMRC. Bridging software submits what your sheet says — it does not check whether your categorisation is correct. The errors that trigger HMRC corrections usually start in the spreadsheet, not the filing.
Bridging software or all-in-one software — which should I choose?
Bridging suits landlords who are confident in Excel and want to keep their existing workbook. All-in-one software suits those who would rather import bank transactions, have them categorised automatically, and avoid maintaining formulas. If your spreadsheet is already error-prone or your portfolio is growing, the manual-entry burden of bridging often outweighs the saving.
Does the £50,000 threshold mean I must use bridging software now?
From April 2026, MTD for Income Tax applies to landlords and sole traders with qualifying income over £50,000, dropping to £30,000 and later £20,000 in stages. If you are in that group you must keep digital records and file quarterly through compatible software — bridging with a spreadsheet is one valid way to do it. Below the threshold you are not yet mandated, but many landlords move early to avoid a last-minute scramble.
Written and reviewed by the LandlordTaxAi Editorial Team. Our guides are reviewed against current HMRC guidance and updated when the rules change. Operated by LandlordTaxAi, United Kingdom. Follow us on LinkedIn.
Last reviewed: 24 June 2026 · Based on HMRC’s MTD for Income Tax guidance on digital records, digital links and compatible (including bridging) software, and the April 2026 £50,000 mandation threshold. Always confirm a bridging tool is on HMRC’s recognised list. This article is informational only and does not constitute tax advice.