Short answer
Yes. HMRC explicitly allows spreadsheets under MTD for Income Tax, as long as you use bridging software to submit the quarterly totals to HMRC's API. You can't submit directly from Excel, but the underlying spreadsheet stays compliant — it just needs a bridge to talk to HMRC.
How it works in practice
- You keep income and expense records in a spreadsheet — Excel, Google Sheets, Numbers, LibreOffice all work
- At quarter end (5 July, 5 October, 5 January, 5 April), you total up income and expenses per HMRC's SA103 categories
- Your bridging software reads those totals from the spreadsheet and formats them for HMRC's MTD API
- Bridging software submits the quarterly update by the deadline (7 August / 7 November / 7 February / 7 May)
- HMRC returns an estimate of your tax bill so far
Our free bridging spreadsheet template is pre-set with HMRC's categories. Pair it with any bridging software from our comparison.
Full answers
Can I still use a spreadsheet under MTD for Income Tax?
Yes. HMRC explicitly allows spreadsheets as digital records under MTD, provided you use bridging software to submit quarterly updates to HMRC's API. You can't submit directly from Excel — you need the bridge — but the underlying record can remain a spreadsheet. This is the cheapest compliance route for many UK sole traders.
What is bridging software?
A small piece of software that reads totals from your spreadsheet and submits them to HMRC's MTD API. Popular free/low-cost options include 123 Sheets, My Tax Digital, Absolute's Excel add-in, and BTCSoftware. See our full comparison at /free-mtd-bridging-software.
What does HMRC mean by 'digital record'?
Records kept in an electronic format (spreadsheet, accounting software, database). Handwritten ledgers and physical receipts alone aren't digital records — but a spreadsheet where you enter income and expenses IS a digital record. HMRC's compliance question is whether the data flows digitally end-to-end: from your record → to bridging software → to HMRC. If you retype figures manually between stages, that's not compliant.
Can I use Google Sheets instead of Excel?
Yes. Most bridging software supports Google Sheets, LibreOffice Calc, and Numbers as well as Excel. Check the specific bridging tool's supported formats — some use CSV imports, some use Excel add-ins, some connect directly.
Do I need to keep receipts as well as the spreadsheet?
Yes. The spreadsheet is your record of income and expense totals. HMRC still requires you to keep supporting documentation (receipts, invoices, bank statements) for at least 5 years after the 31 January filing deadline. Photos of paper receipts stored digitally are acceptable — you don't need paper originals.