What the software must do
- Create, store and correct digital records of self-employment and property income and expenses (HMRC: find compatible software, updated 13 July 2026).
- Send quarterly updates, which HMRC describes as summaries and not tax returns.
- Add other income and submit the tax return by 31 January the following year.
- Work through HMRC's interface. The 2026 regulations call this functional compatible software.
- One product for each separate submission to HMRC. A client can use different products for different tasks, but each submission goes through one product.
Digital links
Where records sit in one product and submissions go from another, the two must be digitally linked (HMRC: create digital records). HMRC's examples are linked cells in a spreadsheet, emailing a spreadsheet of records, moving records on a portable device, XML or CSV import and export, automated data transfer and transfer through an application programming interface (API).
Once a record has been sent in a quarterly update, it must not be moved by hand within the record-keeping software or to other software, for example by retyping it or by cutting and pasting. HMRC's practice chapter of the agent toolkit says data must be digitally linked throughout and never copied and pasted.
Some records need no digital link: non-business income such as dividends, systems such as tills that do not create self-employment or property records, and records for property let jointly with another landlord (HMRC: create digital records).
The two approaches compared
| Bridging software | Record-keeping software | |
|---|---|---|
| Where the records live | The client's spreadsheet or other tool | In the software |
| How records are made | Typed or imported into the spreadsheet | Bank feed, scanned receipts or manual entry |
| How figures reach HMRC | Digitally linked from the spreadsheet | Sent from the records directly |
| Where a correction is made | In the spreadsheet, then linked again | In the software |
| Category totals | Built by the spreadsheet layout | Built from coded records |
| Risk HMRC warns about | Copying or pasting between sheets breaks the link | Moving a sent record by hand |
| Change for the client | Keeps the existing spreadsheet | Moves the client onto new software |
Ways HMRC describes splitting the work
Agent does everything
The agent creates the digital records, sends the quarterly updates and submits the return (HMRC: preparing your practice).
Agent bridges the client's spreadsheet
The client keeps a spreadsheet and the agent uses bridging software linked to it to send the updates and the return.
Client sends the updates
The client keeps records and sends quarterly updates in their own software, and the agent completes the tax return.
Bookkeeper and accountant
A bookkeeper as supporting agent keeps records and sends updates, and the main agent submits the return.
What Making Tax Digital for VAT showed
HMRC's final evaluation of Making Tax Digital for VAT, published 27 February 2025, found 14% of businesses mandated from April 2019 chose bridging software and 74% fully functional software. For those mandated from April 2022, 26% chose bridging software and 54% fully functional software. See lessons from Making Tax Digital for VAT.
Questions
Where is HMRC's list of software?
HMRC's compatible software page links to a finder that asks questions and gives a list to suit the client. HMRC says all listed software has been through its recognition process and that it does not recommend any product.
How detailed must a client's spreadsheet be?
Each record needs the amount, the date and the category. A client with turnover under £90,000 can use simpler categories, and HMRC advises categorising in full if turnover may reach £90,000, because every record for that income source must then be categorised from the start of the tax year (HMRC: create digital records).
How does record-keeping software create records?
HMRC lists three ways: linking to the business bank account to import transactions, scanning receipts and invoices, and entering income and expenses by hand (HMRC: find compatible software).
Does a spreadsheet count as record-keeping software?
Yes, when linked digitally to bridging software. The free record sheet is a spreadsheet laid out by HMRC category.
Does the software need re-authorising?
Yes. HMRC's practice chapter says software authorisation through the agent services account is renewed every 18 months.
Where are the VAT rules?
See Making Tax Digital for VAT rules and the VAT spreadsheet bridging help.
In Accountin
In Accountin, a client's records can come from the ledger, the income tax cash book or an uploaded Excel or CSV record sheet, so the same client can keep a spreadsheet or move into the books.
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