MTD Knowledge Base

Do I have to throw away my spreadsheet? Excel, MTD and bridging software explained

I've used Excel for twenty years. It worked. Why is it suddenly a problem?

It isn't. Not exactly.

Excel is not banned under Making Tax Digital. HMRC has not sent anyone a letter saying "delete your spreadsheets immediately or face consequences." If someone told you that, they were wrong.

But — and this is the bit nobody explains clearly — Excel on its own is not enough anymore. Not because your spreadsheet is wrong. Because of how it connects to everything else.

Here's the actual rule: your digital records must flow to HMRC through a digital link. No manual retyping. No copy-paste between systems. No printing it out and typing the numbers in somewhere else. The data has to move digitally, end to end.

Excel doesn't talk to HMRC directly. So if you want to keep your spreadsheet, you need something in the middle — a bridging software — that reads your Excel and sends the numbers to HMRC without you touching them.

That's it. Excel plus bridging software equals legal. Excel alone equals not compliant.

So what's bridging software then?

Think of it as a translator. Your Excel speaks "spreadsheet." HMRC speaks "API." Bridging software sits between them, reads your numbers and sends them in the right format.

There are plenty of options — some free, some cheap, some part of bigger packages. HMRC keeps a list of compatible software and bridging tools are on there.

The bit Excel can't help you with: keeping the actual receipts

Here's the part that often gets lost in the Excel conversation.

Even if your spreadsheet is perfectly connected and fully compliant, you still need to keep the receipts, invoices and payslips behind those numbers for five years.

Not in Excel. The actual documents.

HMRC doesn't want your spreadsheet as proof. HMRC wants the receipt that proves the number in the spreadsheet is real. Your digital record (date, amount, category) is what MTD requires. The supporting document (the receipt, the invoice, the bank statement) is what the law has always required — and still does.

A thermal receipt from a builders' merchant is unreadable long before five years are up. Paper fades. The full explanation of what HMRC actually requires — and why photos help even though they're not mandatory — is here.

TidGo collects receipts, CIS payslips and income proof as they happen — by WhatsApp photo, forwarded email or in the app. Works alongside your spreadsheet, not instead of it. Try free, no card needed →

The copy-paste rule — this one catches people out

Once you've submitted a quarterly update, you cannot manually transfer those records to another system. Not by retyping. Not by copy-paste. Not by screenshotting and entering manually somewhere else.

If you use more than one piece of software — say, Excel for recording and something else for submitting — they must be digitally linked. Meaning the data flows automatically, not through your fingers.

One practical example: you keep a spreadsheet, do your quarterly totals, copy them into a different program to submit. That's exactly what the rule prohibits. The spreadsheet needs to feed the submission software directly — formula, data connection, export. Not Ctrl+C, Ctrl+V.

The digital link between your records and your submission is the part most people get wrong. TidGo handles the record side — tidy, dated, categorised — so whoever does your submission has something clean to work from. See how it works →

What if my turnover is under £90,000?

Good news. Below £90,000 turnover from a self-employment source, you can use simplified categorisation — meaning you only record whether each transaction is income or an expense. No subcategories, no splitting fuel from materials from tools.

For a lot of sole traders, that's a very short spreadsheet. Which makes the bridging software conversation a lot simpler.

Where to keep the actual documents

Cloud storage. Your computer. An external drive. A USB stick. Wherever you can find them in five years and they'll still be readable.

A floppy disc, if you still have a machine that reads them — HMRC hasn't specifically banned those either. CD-ROM is also technically fine. Though we'd gently suggest a backup plan. And a backup of the backup. On something made after 2005.

Honestly — should you bother with Excel at all?

If you're already comfortable with spreadsheets and your records are clean — keeping Excel with a bridging tool is a perfectly reasonable choice. It costs less than full accounting software, you understand it, and it works.

If you're not really using Excel properly anyway — just throwing numbers in somewhere and hoping for the best — this might be the moment to try something simpler. Not because the law requires it. Because a mess in Excel is still a mess, just a digital one.

For your specific situation, ask your accountant. This covers the general rules. Not tax advice.

TidGo works with your accountant, not instead of them. Works with your spreadsheet, not instead of it. Works before HMRC asks questions — not instead of answering them. Not a replacement for any of them. Just the layer that was missing. Start free — no card needed →

Sources

• Use Making Tax Digital — create digital records — GOV.UK
• Find compatible software — GOV.UK
• Keeping your pay and tax records — GOV.UK