To meet Making Tax Digital, you must keep digital records and submit your updates to HMRC using MTD-compatible software. HMRC publishes a list of recognised products. There are broadly two routes, and the right one depends on how complex your business is and how much you want to spend.
Products like the well-known cloud accounting tools do everything: record-keeping, invoicing, bank feeds and direct submission to HMRC. They're powerful and convenient, but usually come with a monthly subscription and more features (and screens) than a simple sole trader needs.
HMRC allows spreadsheets for digital record-keeping. The catch is that a spreadsheet can't talk to HMRC on its own — you connect it to a small, low-cost piece of "bridging software" that takes your figures and submits them. For many sole traders this is the simplest, cheapest, most familiar route.
Based on official HMRC and gov.uk guidance on MTD-compatible software. General information, not tax advice or a software recommendation — check HMRC's recognised-software list and your own needs.
Our MTD Ready Kit is a structured spreadsheet that prepares the exact figures bridging software needs — and the included guide shows you how to submit. No subscription, you own your files.
See the MTD Ready Kit — £29 Get the free checklist