What bridging software is (and isn't)
Bridging software connects a spreadsheet (Excel, Google Sheets, LibreOffice) to HMRC's Making Tax Digital API. You keep records in a spreadsheet; the bridge submits your quarterly updates to HMRC. That's it — no fancy accounting, no invoicing, just a compliant bridge from digital records to HMRC's tax service.
The alternative is full accounting software (Xero, QuickBooks, FreeAgent, etc.) that has built-in MTD submission. Bridging is cheaper and simpler if you already have a working spreadsheet system. Full software is easier if you're starting from scratch.
Free vs paid — how to think about it
"Free" MTD bridging software falls into three types:
- Free tier — vendor lets you submit a limited number of returns per year at zero cost. Enough for one sole trader with one business.
- Free trial — full product free for a fixed period, then paid.
- Genuinely free / open source — no commercial vendor; community maintained.
For a single sole trader with one self-employment business or one property, the first category is genuinely enough — you don't need to pay unless your business complexity outgrows the free tier.
Comparison — options recognised by HMRC (verified)
The definitive list of MTD-compatible software is on HMRC's site — find MTD-compatible software. The table below covers the bridging options most relevant to UK sole traders keeping records in a spreadsheet.
| Software | Free tier? | Spreadsheet compatibility | Number of businesses | Typical use |
|---|---|---|---|---|
| 123 Sheets | Free trial + low-price paid | Excel, Google Sheets, ODS | Unlimited (paid) | Widely used simple bridge |
| My Tax Digital (formerly ANNA) | Free tier available | Excel, CSV | Small number free | Free-first bridge with paid extras |
| Absolute Excel VAT Filer / MTD ITSA | Free trial then paid | Excel-native (add-in) | Multiple (paid) | Users already deep in Excel |
| BTCSoftware | Free trial then paid | Excel, spreadsheet | Multiple | Small accountancy practice adjacent |
| Coconut | Free tier for sole traders | Direct bank feed (not spreadsheet) | 1 business free tier | Alternative to spreadsheet entirely |
| QuickFile | Free below transaction threshold | Import from spreadsheet | 1 | Free accounting + MTD |
| FreeAgent (via Mettle / NatWest banking) | Free with banking | Bank-fed, spreadsheet import | 1 | Free if you bank with NatWest/RBS/Mettle |
Pricing tiers change frequently. Always check HMRC's compatible-software list for the current status of any specific product before committing.
Decision guide — which suits you
- You already keep detailed spreadsheet records: 123 Sheets or My Tax Digital's free tier will bridge them without changing your workflow.
- You're happy to switch away from spreadsheets: FreeAgent (free with Mettle / NatWest banking) removes the bridging step entirely and gives you full accounting software at £0.
- You use Excel intensively: Absolute's Excel add-in keeps the bridge inside Excel itself.
- You want zero accounting to learn: Coconut categorises your bank feed automatically — no ledger work at all.
Related
- MTD for Income Tax Checker — confirm whether you need this at all
- Free MTD bridging spreadsheet — HMRC-category-aligned template
- Quarterly deadlines calendar
- MTD vs Self Assessment — what actually changes
Sources
- HMRC — Find MTD-compatible software (authoritative list)
- HMRC — Choose the right software for MTD for Income Tax
- Last reviewed 2026-08-23