Do you need accounting software for Making Tax Digital?
30-second answer
You do not need accounting software to comply with Making Tax Digital for Income Tax. HMRC accepts spreadsheet records, as long as your figures reach HMRC through software that can talk to their system.
For a lot of sole traders and landlords, a spreadsheet is the better tool. It does not want your attention, it does not cost a monthly subscription, and it does exactly what you tell it to. Accounting software is built to serve every kind of business at once, which is why it can feel oversized and inflexible for a simple one.
What you need alongside the spreadsheet is bridging software, which carries your totals across to HMRC. That is what suiteSheets does, for £20 covering all four quarterly updates.
It is admin. It sits on the to-do list until a deadline drags it to the top, you get it done, and you go back to the work that actually pays you.
So here is a fair question. If nobody enjoys it, why does so much accounting software seem built to keep you coming back for more?
This guide is one software company's honest answer to that, so read it with that in mind. Accounting software is genuinely the right choice for plenty of businesses. It is just worth understanding what you are buying, and what you are not, before you sign up to pay for it every month.
Most accounting products are designed around you logging in often. Categorising every transaction, tidying every bank feed, reconciling every line, so the software can hand you a wall of dashboards and reports.
Some of those reports are genuinely useful to some businesses. But be honest about how many of them you would actually open. For a sole trader or a landlord keeping things simple, the answer is usually not many. You need to know what came in, what went out, and roughly what you will owe. That is it.
Almost any report worth having at that level can be built in a spreadsheet in a few minutes. A profit figure. A running total. A breakdown by month or by property. None of it requires a subscription.
Accounting software is complicated to make and difficult to maintain. There are decades of tax rules baked in, a very long tail of edge cases, and almost no tolerance for getting the numbers wrong. That costs real money to build and to keep right, which is why the good products are not cheap.
That is not a criticism. It is just the reason a full accounting package tends to cost somewhere between £120 and £460 a year, and the reason those prices tend to rise rather than fall.
It is also worth looking at the whole cost rather than the headline one. Cheaper tiers are often limited in ways that push you upwards once your records grow, and the price you sign up at is rarely the price you are still paying three years later. Whatever you choose, it is worth knowing what the total looks like over a few years, not just this month.
Accounting software has to keep things locked down. Auditability depends on it. You cannot have people freely rewriting history in a system that HMRC and auditors rely on, and that is fair enough.
The trouble is that the same rules have to work for every business the software supports. One rulebook for all of them. So you will often hit a wall where the software will not let you do something perfectly sensible, simply because that action could cause a problem for a different kind of business somewhere else.
You know your situation better than the software does. But the software gets the final say.
Accounting is hard, which means it is hard for developers too. The people building the software have to understand a tangle of tax logic that most accountants spend years learning, then translate all of it into code that behaves correctly in every case.
Then the original developers move on and the next person inherits it. They face the same steep climb, on top of a codebase they did not write. Add more people, more features and more years, and you get the thing every large system eventually gets, which is bugs.
That is not a knock on anyone. It is simply what happens when something this complicated has to keep evolving. It is also why a smaller tool doing one job has less that can go wrong.
A spreadsheet does not want your engagement. It sits there quietly until you need it, and it never sends a notification asking you to categorise anything.
It is not expensive to run. If you have Excel or Google Sheets already, it costs you nothing extra.
It is not restrictive. It does what you tell it, because you know your business and you are the one in charge.
And it will not spring a surprise on you from a feature you have never touched. A cell adds up the cells you point it at. That is the whole behaviour. If something looks wrong, you can see it, right there in front of you.
If you already keep your records this way, you have nothing to change. If you do not, you are not starting from a blank page either. Our free template comes set up with the sheets you need, and you fill it in as the quarter goes on.
Here is the part that makes the spreadsheet approach genuinely simpler rather than just cheaper.
Where income from a business is under £90,000 a year, HMRC lets you report your expenses as a single total instead of splitting every cost into categories. Most sole traders and landlords qualify. suiteSheets is built entirely around that, which is why there is nothing to categorise, nothing to reconcile, and very little that can go wrong.
Landlords record finance costs and mortgage interest as their own figure, because HMRC treats those separately. Everything else goes in as one number.
Full accounting packages can usually do this too, but the option is buried inside a product designed around categories. You have to know it exists to go looking for it.
This is the bit people get wrong. Making Tax Digital does not mean abandoning spreadsheets for a full accounting package. It means keeping digital records and sending HMRC a quarterly update through software that can talk to their system.
A spreadsheet counts as digital records. So your spreadsheet handles the records, and all you need is something to carry the totals across to HMRC. That is called bridging software, and it is exactly what suiteSheets is.
You keep the records, in our template or your own spreadsheet. We handle the HMRC bit. No monthly subscription, no new system to learn, and no dashboards you will never open.
Common questions
Yes. HMRC accepts spreadsheet records as digital records. What you also need is MTD-compatible software to send your quarterly updates, because you cannot submit directly from a spreadsheet. Bridging software fills that gap by reading your totals and passing them to HMRC.
No. You need software that is recognised by HMRC for Making Tax Digital, which is not the same thing as a full accounting package. A spreadsheet plus bridging software meets the requirement.
Bridging software connects your spreadsheet to HMRC's Making Tax Digital system. It reads the totals from your records and submits them, without you retyping any figures. suiteSheets is HMRC-recognised bridging software for Income Tax.
It is, provided your records are complete and your figures reach HMRC through a digital link rather than being retyped. Keeping every transaction on its own row, with the date, a description and the amount, is what HMRC expects. Our template is set up that way already.
£20 covers all four quarterly updates for one income source, and each additional income source is £10. There is no monthly subscription. You only pay when you are ready to submit. Our end of year tax return is in development and will be a one-off £15.
Then a full accounting package may well become the right tool, and there is nothing wrong with moving to one. Your records stay yours, so nothing is locked in. suiteSheets is built for people whose affairs are straightforward, and it is honest about that.
Try the FREE suiteSheets template
Not got a spreadsheet set up yet?
Download the free suiteSheets template and get your digital records in order in minutes, or add our Overview sheet to the spreadsheet you already use.
Open a FREE suiteSheets account
suiteSheets is MTD-compatible software designed for sole traders and landlords who prefer a spreadsheet-based approach to Making Tax Digital.
Open your free suiteSheets account, connect it to HMRC, and you only pay when you are ready to submit.
