Guides · Published 10 August 2026
MTD bridging software vs full software: which do you need?
We build QuarterFile, an MTD tool in this market, so read this knowing that. Every price here is dated so you can check it.
Bridging software connects records you already keep, usually a spreadsheet, to HMRC, and files your quarterly updates from them. Full accounting software replaces the spreadsheet: it holds the records itself, pulls transactions in, and files from there. Both routes are fine with HMRC, whose software guidance (opens in a new tab) describes bridging as software that “will connect to existing records kept in spreadsheets or other accounting tools”.
What is bridging software?
A connector, not a bookkeeper. Your spreadsheet stays the place your records live; the bridging tool reads the figures and sends them to HMRC. The rule to respect is digital links: figures must flow from your records into the submission digitally, never retyped (the digital records rules explain what counts). Bridging tools ran from free to a few pounds a month when we checked in July 2026, and several appear in our free software guide.
What is full accounting software?
The all-in-one route: bank feeds bring transactions in, the software categorises and stores them as your digital records, and the same tool files your updates and final declaration. It usually also does jobs MTD never asked for, like invoicing and payroll. Mainstream plans ran from £7 to about £40 a month when we checked in July 2026, with Xero Simple at £7 plus VAT the cheapest of the big names.
Which one should you choose?
It comes down to where you want your records to live, and who does the typing:
| Route | Your records live in | Typical cost | Fits you if |
|---|---|---|---|
| Bridging | Your spreadsheet | Free to a few pounds a month | Your spreadsheet works and you want to keep it |
| Record-keeping and filing tools | The tool, built from your bank statements | A few pounds a month | You want the typing done for you, without a full suite |
| Full accounting software | The software, fed by bank feeds | £7 to £40 a month | You also want invoicing, receipts and reports |
Is there anything between the two?
Yes: record-keeping and filing tools, the middle row above. They import a bank statement, categorise the transactions into HMRC’s categories, keep that as your digital record, and file: more help than a bridge, less machinery than a suite. QuarterFile is one of these (how it works), and others in the category price similarly by month or by quarter.
Does HMRC mind which you pick?
No. HMRC’s software finder (opens in a new tab) lists recognised products of every type, and recognition is what matters, along with keeping digital records behind whatever files for you. Pick the route that matches how you actually work.
Undecided? Start from cost: the genuinely free options show what £0 buys, and the cheapest ways to do MTD walk the whole price ladder.
Not sure when MTD applies to you?
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This guide is general information, not tax advice. For your own position, check with your accountant or HMRC.