Excel isn't the problem. It's your solution.
Keep using Excel or Google Sheets. Just connect it digitally to HMRC with bridging software.
The Short Answer
Yes, you can continue using Excel. You don't need to switch to accounting software. You simply need HMRC-compatible bridging software, like Otis, to create the digital link between your spreadsheet and HMRC.
Why Excel Works for Self-Employed and Small Business Owners
If you're running a freelance operation, a small consultancy, or managing one or two rental properties with straightforward income and expenses, Excel (or Google Sheets) is perfectly adequate. Here's why:
They're familiar
You already know how to use Excel or Google Sheets. There's no learning curve and no new software to figure out.
They're flexible
Unlike accounting software, Excel lets you track your income and expenses however you want. Custom categories, extra columns, your way.
They're cost-effective
No additional monthly subscriptions. If you've got Excel or Google Sheets, you're ready to go.
You own them
Your file lives on your device or cloud storage. You control your data completely.
They work in real-time
No syncing delays. Enter data, adjust a formula, instantly see the results.
The Reality
Most owners stick with Excel not out of stubbornness, it genuinely works better for them.
It offers complete customisation for tracking metrics unique to your operation. Whether you're a freelancer managing multiple clients, a consultant tracking project-specific costs, a landlord managing their properties, or a self-employed professional with income from various sources, Excel adapts to your reality, not the other way around.
What HMRC Actually Requires
HMRC doesn't require you to stop using Excel. They require your records to be submitted digitally using compatible software.
From April 2026, if you're a landlord, self-employed or running a small business with income above the threshold, you'll need to submit quarterly updates to HMRC. Those updates have to arrive digitally.
The key requirement is a digital link between your records and HMRC's systems. Excel alone can't create that link. Excel paired with bridging software can.
What Is Bridging Software?
Bridging software is a small piece of software that sits between your Excel spreadsheet and HMRC. It reads the numbers you've already entered, checks them, and submits them in the digital format HMRC requires.
It doesn't touch how you keep your books. It doesn't ask you to recategorise anything or learn a new interface. It just handles the last step, getting your figures from your spreadsheet to HMRC.
HMRC's position
This isn't a workaround. Bridging software is listed in HMRC's own guidance as a legitimate way to meet MTD requirements, and it appears on HMRC's official software finder tool.
What Actually Changes Under Making Tax Digital?
Stays the same: your Excel spreadsheet, your bookkeeping, your workflow, your categories.
Changes: how often you report (quarterly instead of annually), the fact that submissions must be digital, and the need for HMRC-compatible software to send them.
Making Tax Digital changes how information reaches HMRC. It doesn't change how you keep your records.
Do I Need Accounting Software?
No. Accounting software like Xero or Sage is one way to comply with MTD, but it's not the only way. Bridging software is a recognised alternative for anyone who'd rather keep using Excel.
Which one makes sense depends on what you're already doing, not on which is "more proper." If your current system works, MTD doesn't require you to replace it.
See How It Works
Your Excel spreadsheet stays exactly as it is. Bridging software like Otis reads your data and formats it for HMRC. Check the categorisation, click submit, and you're done.
| Date | Description | Amount | Type | Category | Reference |
|---|---|---|---|---|---|
| 05/01/2024 | Website design project for client | +£1200.00 | Income | Suggestion: Other Income | 1 |
| 08/01/2024 | Freelance consulting session | +£450.00 | Income | Suggestion: Other Income | 2 |
| 12/01/2024 | Commission income from partner site | +£150.00 | Income | 3 | |
| 15/01/2024 | Purchase of materials for client project | £320.00 | Expense | 4 | |
| 18/01/2024 | Payment to subcontractor for graphics | £500.00 | Expense | 5 | |
| 20/01/2024 | Virtual assistant wages | £300.00 | Expense | 6 |
Bridging Software vs Accounting Software
Both are valid ways to meet MTD requirements. The right one depends on how you already work.
Bridging software suits you if:
- You already track income and expenses in Excel or Google Sheets
- You don't want to learn a new system
- You want the smallest possible change to your workflow
Accounting software suits you if:
- You want built-in invoicing, payroll, or stock management
- You're growing and want more automation
- You'd rather have everything in one platform
What If Excel Stops Being Allowed?
This is where we need to be honest: there's no indication HMRC will stop allowing Excel or Google Sheets.
Will HMRC's technical requirements evolve? Almost certainly. Tax administration always does. But the philosophy that underpins MTD is about accessibility and flexibility. Spreadsheets are accessible to millions of self-employed professionals and small business owners. Forcing everyone onto specialised accounting software would be the opposite of what HMRC is trying to achieve.
At Otis, we build what our users actually need, not what we think they should need. If the rules ever change, we'll adapt, and we'll listen closely to our users to understand how to serve them best in that new environment.
Who Is This Approach Best For?
This setup works well if you already track income and expenses in Excel or Google Sheets and don't want to change that, including:
- Sole traders
- Landlords with one or more rental properties
- Consultants and freelancers
- Small business owners with straightforward income and expenses
MTD changes the submission method, not the way you think about or manage your business finances. You're still the one reviewing your figures and making decisions based on what they tell you. The only difference is that the route to HMRC is digital.
Getting Started With Excel
If you're an Excel user getting ready for MTD, here's what you need to do right now: nothing different than what you're already doing.
Keep your records digitally. Keep them updated. Keep them organised in a way that makes sense to you. When April 2026 arrives, bridging software like Otis will connect those records to HMRC.
Your spreadsheet isn't a limitation. It's your starting point, and for many self-employed professionals and small business owners, it's exactly the right tool for the job.
Common Questions
Can I still use Excel for MTD?
Yes. Excel isn't recognised by HMRC on its own, but paired with bridging software like Otis, it meets the requirement in full.
Can I use Google Sheets?
Yes. The same principle applies. Google Sheets paired with bridging software works exactly the same way as Excel.
Do I need accounting software?
No. It's one valid route, not the only one. Bridging software is a recognised alternative if you'd rather keep your existing spreadsheet.
Is bridging software recognised by HMRC?
Yes. It's listed in HMRC's own guidance as a valid way to meet MTD requirements, and it appears on HMRC's official software finder tool.
Ready to Get Started?
The simplest way to make your Excel spreadsheet MTD compliant, no changes to your workflow required.