Female business owner on a laptop in a restaurant looking at her phone

What is MTD bridging software?

September 7, 2022
Whether you’ve just surpassed the VAT registration threshold or are looking to register voluntarily for VAT, you’ve likely heard of Making Tax Digital for VAT.

Under this scheme, all VAT-registered businesses must store digital VAT records and file VAT Returns directly to HM Revenue and Customs (HMRC) using MTD-compliant software.
If you’ve been doing your taxes manually up to this point, you might be a little hesitant to ditch the spreadsheets in favour of cloud accounting software so soon. Not to worry though — with MTD bridging software, you can comfortably take that first step towards going fully digital with your taxes.

What is bridging software?

Bridging software is a digital tool that connects business records stored in non-compatible software, such as Excel or Google Sheets, to HMRC’s systems.To do this, Making Tax Digital bridging software converts the data stored in these digital records into MTD-compatible data using digital links.

What do I need bridging software for?

As mentioned above, you’ll need bridging software to successfully connect the data stored in spreadsheets to HMRC’s systems.Since HMRC uses Application Programming Interfaces (APIs) to securely enable data exchanges between their systems and your software, the digital links in MTD-compatible bridging software works by acting as a bridge between your VAT data and HMRC.This is essential for ensuring your business keeps MTD-compliant. As of April 2022, all VAT-registered business owners must now follow the rules of Making Tax Digital. This involves:
    Storing digital VAT recordsFile VAT submissions to HMRC using MTD-compatible software
With this in mind, even if you already have bridging software you’ll want to make sure that it’s MTD for VAT approved — otherwise you might not be able to successfully convert and send your data.

Bridging software pros and cons


If you prefer to do your accounting manually, bridging software is happy medium for those reluctant to scrap the spreadsheets straight away.Since you can hook it up to Google Sheets or Microsoft Excel spreadsheets, you’ll be able to send your data over to HMRC without having to make too many changes to your current routine.


As mentioned above, MTD for VAT requires all VAT-registered business owners to not only file VAT Returns digitally, but to also store digital records. While bridging software can only transfer data to HMRC, it doesn’t allow for digital record keeping, so cannot act as an end-to-end MTD solution.Not only do you need to adopt a second solution to store your digital records, but you might need to carry out further calculations for the data in your spreadsheets to successfully convert into a transferrable format.Finally, bridging software doesn’t offer business owners the additional support they might need when filing their tax returns. With so much going on, it’s too easy to forget crucial filing dates and payment deadlines, so it pays to invest in a system that can keep you up to date with your accounting obligations.

Upgrade your accounting

Feel like bridging software isn't right for your small business? With Ember, we’ll take the trouble out of your VAT Returns by digitally storing your VAT records and filing your returns directly to HMRC in a few clicks.

You also don’t need to worry about doing the hard stuff alone. We’ll automatically work out how much you owe HMRC, with an in-house qualified accountant on hand to offer expert support if you need it. Find out more on how Ember can help get your business ready for MTD for VAT.