Can I Use Excel for My MTD Submissions?

TL;DR

Yes. Excel can still be used as part of an MTD-compliant setup when paired with compatible bridging software.

For many sole traders and landlords with relatively straightforward records, Excel can remain a practical and low-cost way to manage income and expenses without needing to completely change systems.

The key thing to understand is:

• Excel itself does not submit figures directly to HMRC
• bridging software creates the digital connection required for submission.

Can Excel Still Be Used for Making Tax Digital?

One of the biggest misconceptions around Making Tax Digital is that Excel is no longer allowed.

That is not true.

Excel can still be used for MTD when combined with compatible bridging software.

In practice, many people are already using spreadsheets in some form anyway, whether that is:

• tracking income and expenses
• recording mileage
• managing rental income
• creating invoices
• or preparing VAT workings.

For many smaller businesses and landlords, Excel is already familiar, simple and easy to maintain.

What often causes confusion is not Excel itself, but how the submission process to HMRC actually works.

What People Usually Get Confused About

In my experience, most people are not asking:

“Can Excel do bookkeeping?”

They are asking:

“Can I continue using Excel without becoming non-compliant?”

A lot of people assume:

• spreadsheets are banned
• they must move to expensive software
• or they need to completely change how they currently work.

Part of the confusion comes from how MTD is often discussed online.

You will frequently see statements saying:

“Spreadsheets are not compatible with MTD.”

On their own, those statements are incomplete.

Excel by itself does not submit figures directly to HMRC. But when combined with bridging software, spreadsheets can absolutely still form part of an MTD-compliant process. You can learn more about MTD here.

That distinction is very important.

How Excel Fits Into an MTD Setup

For many people, Excel remains the core part of the bookkeeping process.

The spreadsheet contains:

• income
• expenses
• totals
• and the figures ultimately being submitted.

The role of bridging software is to create the digital connection between those figures and HMRC.

A simplified workflow usually looks something like this:

Excel Spreadsheet

↓

Bridging Software

↓

HMRC Submission

In practice, the day-to-day use of Excel often stays largely the same.

The biggest change is usually the submission process itself.

What Does Bridging Software Actually Do?

Bridging software acts as the link between your spreadsheet and HMRC.

It allows figures stored in Excel to be submitted digitally while remaining compliant with MTD requirements.

HMRC states:

“If you use spreadsheets to record income and expenses, bridging software can connect to them and make your submissions to HMRC.”

For many people, this is the missing piece of the puzzle.

Once they understand that bridging software sits between Excel and HMRC, the whole process often becomes much easier to understand.

In my experience, people are usually relieved to discover they may not need to abandon systems they already know how to use.

Why Many People Want to Keep Using Excel

For smaller businesses and landlords, Excel often appeals because it is:

• simple
• familiar
• flexible
• low cost
• and easy to access.

Many people are not looking for advanced automation or large software ecosystems.

They simply want:

• a manageable process
• clear records
• and a compliant way to submit figures.

I’ve also noticed that many people mainly want reassurance that they do not need to make drastic changes to how they already manage their bookkeeping.

For someone who has used spreadsheets comfortably for years, moving immediately into full accounting software can sometimes feel unnecessary and overwhelming.

My Experience Using Excel for MTD VAT Submissions

When HMRC introduced MTD for VAT back in 2019, we used bridging software to submit VAT returns directly from Excel-based VAT workings.

The process was straightforward because we were already using spreadsheets internally.

In practice, very little changed about the actual bookkeeping process itself.

The bridging software simply handled the digital submission element.

We still use Excel and bridging software for VAT submissions today.

For many straightforward setups, if the existing process already works well, there may be little reason to completely replace it.

When Excel Works Well for MTD

Excel can work particularly well for:

• sole traders with relatively straightforward records
• landlords with simple rental income and expenses
• businesses with lower transaction volumes
• people already comfortable using spreadsheets
• those looking for a simpler and lower-cost setup.

For example, someone with:

• one main income source
• predictable expenses
• and regular record keeping habits

may find Excel perfectly manageable.

In many simpler situations, the challenge is not necessarily the bookkeeping itself. It is creating a process that feels sustainable and easy to maintain throughout the year.

If you are unsure whether spreadsheets are suitable for your situation , you can also read our guide on using spreadsheets for Making Tax Digital or take the MTD suitability quiz.

When Excel May Start Becoming Less Practical

Excel is not the perfect solution for every business.

There are situations where full accounting software may become the more practical option.

This is especially true where there are:

• very high transaction volumes
• complex VAT structures
• stock and inventory tracking
• payroll requirements
• multiple income streams
• or heavy automation needs.

For example, businesses processing hundreds and hundreds of transactions each month may benefit from software rules and automation tools.

At that stage, manually managing spreadsheets can become more time consuming and difficult to maintain accurately.

The right solution often depends more on complexity than simply turnover alone.

Common Mistakes When Using Excel

The biggest spreadsheet problems are often surprisingly simple.

Common issues include:

• incorrect formulas
• inconsistent layouts
• miscategorised expenses
• duplicated entries
• or leaving bookkeeping until the last minute.

In my experience, regular updates matter far more than trying to create the perfect spreadsheet.

Even updating records monthly can make the process significantly easier than rushing everything shortly before deadlines.

I’ve also seen people overcomplicate spreadsheets unnecessarily.

For example, some people think every small receipt must be individually entered line by line.

In practice, there are situations where summarising totals sensibly can keep bookkeeping far more manageable while still maintaining proper supporting records.

Why Simplicity Often Matters More Than Automation

A lot of accounting software marketing focuses heavily on:

• automation
• integrations
• AI tools
• bank feeds
• and advanced reporting.

Those features can absolutely be valuable for some businesses.

But many smaller businesses and landlords are simply looking for:

• clarity
• simplicity
• and a process they can realistically stick to.

In my experience, smaller businesses often care more about keeping things manageable than having every possible feature available.

Sometimes the simplest system is the one that gets maintained consistently.

Final Thoughts

If you currently use Excel for bookkeeping, Making Tax Digital does not necessarily mean you need to abandon it.

For many sole traders and landlords with relatively straightforward records, Excel can still form part of a compliant MTD setup when paired with bridging software.

The important thing is understanding:

• how the submission process works
• when spreadsheets are suitable
• and when software may become the better option.

In many cases, people are already much closer to being prepared for MTD than they realise.

If you want to see whether a simpler spreadsheet-based MTD setup may work for your situation, you can take the quick quiz below.