Bridging Software vs Full Record-Keeping: Which Do You Need?
There are three categories of MTD-compatible software. Understanding the difference helps you choose the right approach — and avoid compliance pitfalls like broken digital links.
The Three Software Categories
HMRC's guidance describes software that either creates digital records or connects to your existing records, such as those held in spreadsheets (Choose the right software for Making Tax Digital for Income Tax). In practice products fall into three categories, and each plays a different role in your MTD workflow.
Full Record-Keeping
All-in-oneCreates and maintains your digital records and submits quarterly updates directly to HMRC. No other software needed. Examples: MTDone, FreeAgent, Hammock.
Best for most landlords
Bridging Software
Submits data from your existing records to HMRC. Designed to work alongside spreadsheets or other record-keeping tools. Requires a digital link between systems. Examples: mtd.tax, GoFile.
Spreadsheet users
Record-Keeping Only
Creates and stores digital records but cannot submit to HMRC. Must be paired with bridging software, with a digital link between them. Requires managing two separate tools.
Needs pairing with bridging
Side-by-Side Comparison
| Feature | Full Record-Keeping | Bridging | Record-Keeping Only |
|---|---|---|---|
| Keeps digital records | |||
| Submits quarterly updates to HMRC | |||
| Works on its own (no extra software) | |||
| Works with spreadsheets | |||
| Bank account sync | |||
| Automated transaction categorisation | |||
| HMRC-recognised compatible software | |||
| Requires digital link to another tool |
Pros and Cons for Landlords
Full Record-Keeping Software
Advantages
- One tool for everything — records, categorisation, and HMRC submission
- Bank sync pulls transactions automatically — no manual data entry
- No digital linking headaches between systems
- Real-time profit/loss visibility throughout the year
- Reduces human error — no re-keying or copy-pasting
- Quarterly submissions typically take minutes, not hours
Disadvantages
- Monthly or annual subscription cost
- Requires changing existing habits if you currently use spreadsheets
Bridging Software
Advantages
- Keep your existing spreadsheet — no need to change your record-keeping habits
- Generally lower cost than full record-keeping software
- Can be a quick path to compliance for simple portfolios
Disadvantages
- Requires maintaining a valid digital link — easy to break accidentally
- Spreadsheet must still be kept with HMRC-required date/amount/category fields
- No automation — manual data entry every quarter
- Two tools to manage and keep in sync
- No real-time tax estimates or profit tracking
Where Do Spreadsheets Fit?
Spreadsheets are not banned under MTD — but they cannot do the job alone. A spreadsheet can satisfy the digital record-keeping requirement if it is digitally linked to bridging software that handles the HMRC submission.
The digital linking requirement
If you use a spreadsheet as your record-keeping tool and bridging software to submit to HMRC, the two must be connected via a digital link — meaning data transfers electronically between them. You cannot type figures from your spreadsheet into the bridging software by hand, copy-paste them, or re-key them in any way. Doing so breaks HMRC's digital linking rules.
For more detail on what counts as a digital link, see our full MTD guide.
Most bridging users report three-line accounts
If your turnover is below the VAT registration threshold (currently £90,000) for each relevant source of income, HMRC lets you report everything else as one income total and one expense total. But if you receive UK property income from residential property, mortgage interest and other residential property finance costs must still be recorded and sent to HMRC separately from your other expenses in every quarterly update, regardless of turnover — so bridging software from a simple spreadsheet gets a residential landlord to three-line accounts, not two. See our guide to three-line accounts and simplified reporting for who qualifies and what still has to be recorded. Source: HMRC digital record-keeping notice and Create digital records.
Bridging works for a foreign property business too
A foreign property business keeps its own digital records and sends its own quarterly updates, separately from any UK property business, and bridging software can submit for it in the same way it does for a UK one. Figures are entered in pounds sterling, converted at the exchange rate when the income arose. See our foreign property guide.
Which Approach Is Right for Me?
The right choice depends on your portfolio size, how you currently manage records, and how much time you want to spend on tax admin.
I have 1–2 properties, simple income, and I already use spreadsheets
Bridging software may be sufficient — provided you can maintain a proper digital link and keep your spreadsheet to HMRC's standards. However, be prepared for four manual exports per year.
I have 3+ properties or mixed income (property + self-employment)
Full record-keeping software will save significant time. Managing multiple income streams manually across quarters becomes error-prone — automation pays for itself quickly.
I want to minimise time spent on tax admin
Full record-keeping software with bank sync is the clear choice. After initial setup, quarterly submissions typically take a few minutes to review and submit.
I prefer to keep using my existing accounting tool
Check whether your existing tool is HMRC-recognised full record-keeping software. If it only keeps records (no HMRC submission), you'll still need bridging software digitally linked to it.
How MTDone Fits In
MTDone is full record-keeping software for MTD for Income Tax, listed on HMRC's software list (opens in a new tab). It connects to your bank accounts via Open Banking, automatically imports and categorises transactions, and lets you review and submit your quarterly update to HMRC directly from within the app.
You don't need a spreadsheet, bridging software, or any other tool alongside it. Everything — from transaction categorisation to HMRC submission — happens in one place.