MTD bridging software vs full bookkeeping software: which do you need?

Updated 4 October 2026 · By the MTD Totals team

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Short answer: yes, you can keep your spreadsheet under Making Tax Digital for Income Tax. You pair it with bridging software, which reads your spreadsheet totals and sends them to HMRC. It suits people with few transactions who already keep tidy records. If you have bank feeds to reconcile, several income streams, or you dread month-end, full bookkeeping software usually saves more time than it costs.

What each one does

Bridging software is a connector. You keep recording income and expenses in Excel or Google Sheets. Each quarter the bridge pulls the figures from your spreadsheet and submits them to HMRC. The link has to be digital: the bridge reads the cells, you don't retype the numbers.

Full bookkeeping software replaces the spreadsheet. It pulls transactions straight from your bank, lets you tag each one, keeps receipts, and builds the quarterly update for you.

	Bridging software	Full bookkeeping software
Where your records live	Your spreadsheet	The app
Bank feeds	No (you enter data)	Usually yes
Receipt capture	No	Usually yes
Typical cost	Free to about £50 a year	Free to about £20 a month
Learning curve	Low if your spreadsheet is already good	A few hours to set up
Year-end return	Sometimes extra	Usually included
Best for	Few transactions, organised spreadsheet users	Bank-heavy businesses, mixed income, anyone who wants it automated

Bridging options and prices

Checked on vendor pricing pages on 4 October 2026:

ANNA bridge: free. Covers quarterly updates; the year-end return is filed separately.
Coconut MTD Bridging: £49.99 a year, plus £49.99 if you want Coconut to do the year-end declaration too.

Several full-software vendors also accept spreadsheet imports, so check before you buy two products.

When bridging is the right call

You have one property or one simple trade and fewer than about 30 transactions a month.
Your spreadsheet already has a row per transaction with a date, amount and category. MTD requires all three.
You're happy to keep doing the typing.
You want the lowest possible cost this year and may move to full software later.

When full software is worth it

Most of your income and spending runs through a bank account you could connect.
You have rental and self-employed income, or several properties, and need them kept separate.
You lose receipts. Apps that photograph them pay for themselves at tax time.
You'd rather spend £7 to £13 a month than an evening each quarter. Xero Simple and Sage Sole Trader cost about £7 ex VAT; Hammock for landlords is £8 + VAT; Coconut's full MTD plan is £12.99.

A quick test

Open your current spreadsheet and look at last month.

Is every transaction on its own row, with date, amount and category? If not, you'd be rebuilding it anyway: go straight to full software.
Did it take you more than an hour to update? If yes, bank feeds will likely save you that time every month.
Is everything correct and up to date? If yes, a free bridge is enough. Keep it that way.

What MTD requires either way

Whichever you pick, you must keep digital records of each transaction (date, amount, category), send a quarterly update by 7 August, 7 November, 7 February and 7 May, and file a final declaration by 31 January after the tax year ends (GOV.UK). The quarterly updates are running totals, so a mistake in one quarter can be fixed in the next.

Related guides

Sources: vendor pricing pages (checked 4 October 2026); GOV.UK: send quarterly updates; GOV.UK: find compatible software.

Keep your records in a spreadsheet or a bank account?

MTD Totals turns a bank statement CSV into cumulative MTD quarterly totals and Self Assessment figures, sorted into HMRC categories. It runs in your browser, so nothing is uploaded. Free to try, £9 once to unlock everything.

Try it with your bank CSV