Can I use a spreadsheet for Making Tax Digital for Income Tax?
Short answer
Yes, you can keep your records in a spreadsheet and use bridging software to send your quarterly updates and tax return to HMRC. The bridging product must be on HMRC's list.
How bridging software works
Bridging software connects to records you already keep, such as a spreadsheet, and makes the submissions to HMRC. Some bridging products send both the quarterly updates and the tax return (GOV.UK). HMRC's guide says spreadsheets need bridging software to link them to your updates and return (GOV.UK).
What your spreadsheet must hold
Each income and expense item with its amount, its date and its category, in the categories of Self Assessment. Keep the layout your bridging software expects, and keep each tax year in one place, because updates run from 6 April.
When a spreadsheet stops being the easy option
HMRC's own campaign page notes that spreadsheets lack the time saving features of many record keeping apps, such as receipt scanning and error checks (HMRC). With several properties, a trade and a let, or many card payments, typing it all in each quarter adds up.
A third way: your AI keeps the books
Octobooks keeps the books of UK sole traders and landlords and sorts every entry into the categories of the self-employment pages (SA103F) and the UK property pages (SA105). Its Making Tax Digital for Income Tax connection is built and runs end to end against HMRC's test service (the sandbox). Octobooks is not on HMRC's list of compatible software yet; we are working towards recognition. Until it is listed, send your updates and your return through a product that is on the list. Its reports can also be downloaded as Excel.
More questions
- What are MTD quarterly updates, and when are they due?
- Which accounting software works for Making Tax Digital for Income Tax?
- Can AI do Making Tax Digital for Income Tax for me?