Can I Use a Spreadsheet for Making Tax Digital? The Real Answer

With Making Tax Digital for Income Tax Self Assessment starting in April 2026, many landlords are asking whether they can continue using their trusty spreadsheet. The short answer is: only if you also use bridging software, and even then it is not the best approach.

This guide explains what bridging software is, what HMRC actually requires for digital links, the practical limitations of a spreadsheet-plus-bridging approach, and why native MTD software is a better alternative.

What HMRC Actually Requires

HMRC's MTD for ITSA rules require three things:

1. Digital records: Your income and expense data must be stored digitally in a format that meets HMRC's specifications
2. Digital links: Data must flow from your records to HMRC without manual re-typing. Copy-and-paste is specifically not allowed.
3. Quarterly submissions: You must submit income and expense summaries to HMRC every quarter via the MTD API

What Is Bridging Software?

Bridging software is a tool that sits between your spreadsheet and HMRC. It reads data from your spreadsheet and submits it to HMRC via the MTD API. It bridges the gap between a non-compliant record keeping method and HMRC's digital requirements.

How it works in practice:

1. You maintain your records in a spreadsheet as you do now
2. Your spreadsheet must follow a specific format that the bridging software can read
3. The bridging software connects to your spreadsheet and extracts the relevant totals
4. It submits those totals to HMRC via the API
5. You receive confirmation of submission

The Digital Links Requirement

HMRC's digital links requirement is where things get tricky. Digital links means that data must flow between software programs, products, or applications without manual intervention. Specifically:

• Typing data from a spreadsheet into a separate submission tool is not a digital link
• Copy-and-paste is not considered a digital link by HMRC
• The bridging software must read directly from your spreadsheet file
• The spreadsheet must be in a specific format that the bridging software understands
• Any modification to the spreadsheet format can break the digital link

Limitations of Spreadsheet + Bridging

Even with bridging software, using a spreadsheet for MTD has significant drawbacks:

• Double cost: You pay for bridging software (typically 50-150 pounds per year) on top of maintaining your spreadsheet
• Format restrictions: Your spreadsheet must follow the exact format required by the bridging software, limiting your flexibility
• No automation: You still manually enter every transaction, the bridging software only handles submission
• No bank feeds: Bridging software does not import bank transactions for you
• No compliance tracking: Gas safety, EICR, and deposit deadlines are still your responsibility to track manually
• Error risk: Spreadsheet errors are submitted to HMRC, and corrections require amendment submissions
• Fragile setup: A changed column header, moved cell, or reformatted sheet can break the bridging connection
• No receipt storage: Receipts must be stored separately

Native MTD Software: The Better Alternative

Native MTD software like Latch is purpose-built for Making Tax Digital compliance. Instead of bolting a submission tool onto an inadequate record keeping system, everything works together:

Making the Switch

If you are currently using a spreadsheet, transitioning to native MTD software before April 2026 is straightforward:

1. Sign up for Latch and set up your properties
2. Import your existing spreadsheet data for historical records
3. Connect your bank account for automatic transaction imports
4. Set up your tenancies and compliance tracking
5. Submit your first quarterly update directly from Latch

Most landlords complete the setup in under an hour per property and immediately benefit from automated bank feeds, compliance alerts, and simplified reporting.

The Verdict