What software do I need for Making Tax Digital?
Making Tax Digital means you must keep your records in digital form and submit updates to HMRC using compatible software.
The good news is that most modern cloud accounting systems are already built with MTD in mind. Here’s what you need to know.
What counts as MTD-compatible software?
To meet HMRC’s rules, your software must be able to:
Store digital records of your income and expenses
Maintain digital links between records
Submit updates directly to HMRC
We use Xero but HMRC has a great list of other recognised software providers here.
Most well-known cloud platforms are either already compatible or are updating their systems ahead of the deadlines.
Can I use spreadsheets?
Yes, you can, but with conditions. Spreadsheets are allowed as long as they:
Store your digital income and expense records
Connect digitally to bridging software that submits to HMRC
Maintain proper digital links (you can’t simply copy and paste between systems)
If you’re currently using spreadsheets, we can help you link them to bridging software correctly or carry out the process for you using our own.
How much does MTD software cost?
Costs vary depending on the system and level of support you need.
Basic packages are often available at modest monthly subscriptions. The real value, though, comes from what the software gives you:
A live view of profit
Clearer understanding of your tax position
Easier quarterly submissions
Better forward planning
When your numbers are up to date, your tax planning can be more proactive, so you can set money aside steadily and make pension or investment decisions with confidence.
Do I have to submit the updates myself?
Just like with your year-end tax submissions, you can authorise us to submit your quarterly updates on your behalf. Many clients prefer this because it removes the pressure of deadlines and ensures everything is checked before they submit.
We’ll still keep you informed and involved. But it means you won’t need to manage the filing process alone.
If you’d like help reviewing your current setup, choosing software that supports both compliance and smarter tax planning, or would like us to handle MTD for you, get in touch. We’ll make sure your process works for you, not the other way around.