To bridge or not to bridge? That is the MTD question!

To bridge or not to bridge? That is the MTD question!

HM Revenue & Customs (HMRC) has relaunched private beta testing of Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) ahead of mandatory use for some taxpayers from the 2026/27 financial year.

With this announcement comes the addition of two compatible software options to the list of those which comply with MTD for ITSA.

Now comprised of seven compatible software solutions, the official list provides trial participants with both end-to-end products which support record-keeping and submission, all the way over to bridging software which connects digital records with the MTD portal.

As experts in the practice management solution space, we often advise on the right option for firms looking to comply with current MTD for VAT rules, and we are now considering the position of those who will need to use MTD for ITSA in the coming years.

How to stay compliant

MTD requires all VAT-registered companies to keep digital financial records and submit quarterly updates to HMRC.

Some sole traders and landlords will soon be required to do the same under MTD for ITSA – from 6 April 2026 for those earning over £50,000 per annum.

For many firms, MTD requirements have been easily met through existing practice management solutions or accounting software.

However, there are plenty of reasons that we’ve come across as to why a firm or sole trader might not have the required architecture in place – whether that be based on cost or requirements, aside from MTD compliance.

This is where bridging software comes in, allowing you to transfer relevant financial data easily and securely from your digital records to the MTD portal.

What are you looking for in a bridging solution?

Not all bridging software products for MTD are created equal.

This is a positive thing, reflecting the diverse needs of business clients in the market and the innovative ways that software providers are meeting these requirements.

We would recommend using a bridging solution if you can’t commit financially to a full accounting solution. You may also adopt one to support efficiency, if you do not wish to adopt entirely new working practices for this purpose only.

In our experience, the best bridging solutions have this need for adaptability and flexibility woven into the fabric, recognising that this is a major shift towards digital record-keeping which may disrupt processes which have been in place for years.

To negate these difficulties, we have created an MTD solution which is suitable across the board, recognising a universal need for:

  • Adaptability – Enabling the straightforward connection of data and reducing the burden of migration.
  • Compliance – Checking for errors and missing information before submission.
  • Efficiency – Automating manual tasks and reducing the risk of errors, providing you with an overview of all submissions, obligations, liabilities and outstanding tasks.
  • Affordability – Avoiding non-compliance penalties and working for those who aren’t ready to make a larger investment, very affordable submission costs.
  • Confidence – HMRC approved and full submission history provided.

As the commercial tax landscape moves further towards MTD and MTD for ITSA comes into force over the next three years, now is the time for firms and all businesses to consider what they need from their MTD-compatible software and how it will fit into their wider infrastructure and expenditure strategy.

Want to book a demo of our MTD bridging solution? Get in touch with our team.

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