Can I use a spreadsheet for MTD for Income Tax?
Many sole traders already keep their records in a spreadsheet and wonder whether that still works under Making Tax Digital for Income Tax. The short answer: a spreadsheet can be a good place to keep digital records, but it cannot send your quarterly update to HMRC by itself.
What a spreadsheet can and cannot do
Under MTD for Income Tax you keep digital records and send HMRC quarterly updates using software that connects to HMRC. A spreadsheet can hold your records and your calculations. To send the update you need software that talks to HMRC, which can be HMRC-recognised software, or bridging software that connects a spreadsheet to HMRC. The rules about how records are kept and linked can change, so check GOV.UK’s list of compatible software and the current guidance before you rely on a particular set-up.
Spreadsheet, calculator or full software?
| Spreadsheet | MTD calculator | Full accounting software | |
|---|---|---|---|
| Keeps your records | Yes, if you build it | Works from your bank statement | Yes |
| Cumulative quarterly figures | You build the formulas | Worked out for you | Yes |
| Sends the update to HMRC | No, needs extra software | No, use compatible software | Usually yes, if HMRC-recognised |
| Effort and cost | Your time | £50 a year with MTD Software | Usually a monthly fee and more to learn |
Where MTD Software fits
If you only want the right quarterly totals, the calculator does that part. You paste or import your bank statement, categorise it, and get cumulative figures by category, with taxable profit and a PDF. You then download them as a CSV file and import it into your spreadsheet or HMRC-recognised software such as 123 Sheets, or give them to your accountant. It does not replace the software that submits to HMRC, and it does not need you to build or maintain formulas.
If you already have a spreadsheet
You can keep it. Many people use the calculator as a check on their own spreadsheet totals, or to handle the categorising and cumulative adding that is easy to get wrong when quarters build on each other. See cumulative figures explained for how each update adds up from 6 April.
Frequently asked questions
Can I keep my records in a spreadsheet for MTD?
A spreadsheet can hold your digital records. Check GOV.UK for the current rules on how records are kept and linked.
Can I send my MTD quarterly update from Excel?
Not on its own. You need software that connects to HMRC, either HMRC-recognised software or bridging software that links your spreadsheet to HMRC.
Does MTD Software submit to HMRC?
No. It works out the cumulative figures and lets you download them as a CSV or PDF. You then import the CSV into HMRC-recognised software such as 123 Sheets to submit.
Related guides
- MTD calculator for the self-employed
- Categorise bank transactions for MTD
- Who needs MTD for Income Tax?
- Quarterly update deadlines
- Allowable expenses and categories
- Cumulative figures explained
This guide is general information, not tax advice. Always check GOV.UK or ask an accountant about your own position. Last updated 2 November 2026.