Can I use Excel for Making Tax Digital?
30-second answer
Excel spreadsheets can be used as part of a Making Tax Digital process.
HMRC allows spreadsheet users to keep their records in Excel spreadsheets as long as those records form part of a digital process and submissions are made using compatible software.
Many sole traders and landlords continue to use spreadsheets for their record keeping and use MTD bridging software to submit the required information to HMRC.
One of the biggest misconceptions about Making Tax Digital is that everyone needs to move to a full accounting package. That's not necessarily the case.
This guide is most relevant if you are:
- A sole trader or landlord
- Currently using Excel spreadsheets
- Looking for a simpler alternative to bookkeeping software
- Interested in how Excel spreadsheets works for MTD
This guide covers
This guide is provided for general information only and is based on HMRC guidance available at the time of writing.
HMRC's own guidance states: "if you use spreadsheets to record income and expenses, bridging software can connect to them and make your submissions to HMRC".
The connection between your spreadsheet and your chosen bridging software must meet HMRC's digital link requirements. Copying and pasting or any manual re-typing is not allowed.
Digital records can be linked in a variety of different ways, including linked spreadsheet cells with compatible bridging software and/or within full accountancy software.
In short
HMRC confirms that spreadsheet users can continue to use their existing records for MTD, as long as submissions are made using MTD-compatible bridging software.
Digital records are electronic records of your self-employment or rental property income and expenses.
A digital record under MTD for Income Tax means every individual business transaction recorded electronically under three labels: date, amount and category (income or expense).
For many sole traders and landlords, Excel spreadsheets is where those records are created and maintained.
In short
If you record your income and expenses in Excel spreadsheets, you are keeping digital records.
A digital link is simply a way of moving information from one place to another electronically, without manually typing the same figures out again.
HMRC requires a digital link from transaction through to submission as part of the MTD process.
If you use Excel spreadsheets, a digital link might be a formula that pulls your income total from one sheet into a summary sheet, and/or uploading your spreadsheet directly into bridging software, rather than typing the figures in manually.
In short
A digital link is a way of transferring information between transactions, records, spreadsheets or software without manually retyping the figures.
MTD bridging software is designed to help people who keep their records in spreadsheets meet Making Tax Digital requirements without moving everything into a bookkeeping platform.
For many sole traders and landlords, spreadsheets are already where income and expenses are recorded. Bridging software acts as the connection (digital link) between your digital records and HMRC's Making Tax Digital system.
In short
MTD bridging software helps spreadsheet users submit the information HMRC requires without necessarily moving to full accounting software.
When people hear the word “software”, they often assume they need to move everything into a full accounting package.
Whilst you do need software that works with Making Tax Digital, that does not necessarily mean you need a full bookkeeping or accounting platform.
Some people choose full accounting software because they want features such as bank feeds, invoicing, reconciliation and wider reporting.
Other people prefer a spreadsheet-based approach because their records are straightforward and they already understand Excel spreadsheets.
The important distinction is between software that can submit through the Making Tax Digital system and full accounting software. They are not always the same thing.
In short
It is your choice whether your records are kept in a spreadsheet, an accounting package or by an accountant. What matters is that the information is stored digitally and can be submitted to HMRC through compatible software.
Possibly, but it depends on how your spreadsheet is set up and what your chosen MTD software requires.
HMRC does not require taxpayers to abandon spreadsheets. However, your spreadsheet records need to work within a digital process that supports Making Tax Digital requirements.
Depending on the software you use, this may involve uploading information from an existing spreadsheet, linking data into a template or using a spreadsheet designed specifically for MTD submissions.
In short
You may be able to keep your existing Excel spreadsheet, but it needs to work with software that supports Making Tax Digital.
suiteSheets is MTD-compatible bridging software designed for sole traders and landlords who prefer a spreadsheet-based approach to Making Tax Digital.
Instead of moving everything into a bookkeeping platform, you can work with a full suiteSheets template or simply add the Overview sheet to your existing spreadsheet.
suiteSheets templates are designed for simple, practical record-keeping and also work in Google Sheets.
When a submission is due, you simply upload your spreadsheet to your suiteSheets account. Our system reads the totals directly from your Overview sheet, shows them clearly on screen, and asks you to confirm that everything looks correct. Once you're happy, you can submit the figures straight to HMRC.
Full suiteSheets template
Ideal if you want a clean, fresh start to your record keeping.
- Income and expense sheets
- Overview sheet built in — figures calculate automatically
- Quarterly profit/loss totals ready to review and submit
- Works in Excel and Google Sheets
- HMRC recognised categories
Overview sheet only
Ideal if you have a spreadsheet set up and want to keep it.
- Simply add our Overview sheet to your current spreadsheet
- Input a simple formula to link your existing totals
- Works in Excel and Google Sheets
- HMRC recognised categories
Excel plus MTD software
- Keep using spreadsheets you're already familiar with
- Ideal for straightforward sole trader and landlord records
- You stay in control of your records
- Focused on digital record keeping and MTD submissions
- Usually quicker to get started if you already use spreadsheets
- Often a lower-cost MTD option
Full accounting software
- Move records into a dedicated bookkeeping system
- Often suited to more complex bookkeeping needs
- Records generally update automatically
- Often includes invoicing, bank feeds and reporting
- Usually involves learning a new way of working
- Often charged as an ongoing monthly subscription
Excel spreadsheets can be used as part of digital record keeping for MTD, but the information needs to be submitted using bridging software that works with Making Tax Digital.
Excel spreadsheets alone can’t submit MTD updates directly to HMRC. You need bridging software that works with Making Tax Digital to send the required information.
If you record your self-employment or property income and expenses in Excel spreadsheets, you are keeping digital records.
The digital link is the digital movement of data from your spreadsheet records into the bridging software used for submission.
HMRC examples include linked spreadsheet cells, CSV imports and exports, file uploads, automated transfers and API transfers.
Yes. You can add our Overview sheet to your existing spreadsheet using our instructions.
The Overview sheet is required for suiteSheets to read your figures and submit to HMRC. The Overview sheet and suiteSheets platform together provide the MTD solution.
When a submission is due, you download your Excel spreadsheets file and upload it to the suiteSheets platform. suiteSheets reads your Overview sheet and displays your cumulative totals for you to verify before transmitting them to HMRC.
Yes. Landlords can use Excel spreadsheets as part of their digital record keeping process provided the records meet MTD requirements and submissions are made using compatible software.
Yes. Sole traders can use Excel spreadsheets as part of their digital record keeping process provided the records meet MTD requirements and submissions are made using compatible software.
Neither is better or worse for MTD. Both can be used as part of a compliant digital record keeping process.
The best choice is usually the one you're already comfortable using and that works with your chosen MTD software. See our Google Sheets and MTD guide for more detail.
This guide is provided for general information only and is based on HMRC guidance available at the time of writing.
suiteSheets is software for spreadsheet users. We do not provide tax advice, accounting advice or legal advice. If you are unsure how Making Tax Digital applies to your circumstances, contact HMRC or a qualified adviser.
These HMRC pages provide further context on Making Tax Digital for Income Tax, eligibility, digital records, compatible software and signing up.
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suiteSheets is MTD-compatible software designed for sole traders and landlords who prefer a spreadsheet-based approach to Making Tax Digital.
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