MTD VAT Software: HMRC-Compatible Tools and Bridging Options

For Making Tax Digital for VAT you essentially have two routes to compliance — and they are equally valid in HMRC's eyes.

• Full bookkeeping software records every sales and purchase invoice, calculates VAT automatically, and submits the VAT return in the same place.
• VAT bridging software sits on top of a spreadsheet you already use, reads the nine VAT return boxes, and submits them to HMRC.

Examples of HMRC-recognised full packages for MTD VAT include Xero, QuickBooks Online, Sage Business Cloud Accounting, FreeAgent, Zoho Books, and others. They handle invoicing, bank feeds, expense capture, and VAT return generation in one product, typically on a monthly subscription.

These suit businesses that want a single source of truth for accounting, want to add payroll or invoicing later, or work with an accountant who already uses one of these platforms.

Bridging software is the answer for businesses that maintain VAT records in Excel or Google Sheets and do not want a full accounting package. The bridging tool reads your spreadsheet's nine-box totals, authenticates with HMRC, and submits the VAT return.

To stay compliant, the path from your source records to the bridging tool must use digital links — formulas, cell references, or imports — not retyped values. Many UK accountants offer bridging software; some are free for very small filers.

Can I still use spreadsheets under MTD? →

1. Confirm the product is on HMRC's recognised software list for MTD VAT.
2. Check it supports your VAT scheme (standard, flat rate, cash accounting, margin schemes).
3. Check whether it handles partial exemption or VAT groups if relevant.
4. Confirm pricing, including whether VAT submission is included or charged per return.
5. Look for UK-based support, especially around the VAT return deadline.

HMRC does not provide its own MTD VAT submission software. The HMRC role is to publish and maintain the recognised software list, and to operate the MTD for VAT API that third-party software submits returns through.