Despite certain companies that produce accounting software stating otherwise, spreadsheets CAN be used with Making Tax Digital (MTD) for Income Tax. There is no need to change the way you work or purchase an expensive and complicated accounting package - simply carry on working with your trusted spreadsheet files.
If you record and calculate your Income Tax figures in Excel, Google Sheets, OpenOffice Calc or any other software that can export to an Excel, text or CSV file, a bridging solution such as Easy MTD must be used. This software sits between the spreadsheet and HMRC and satisfies the digital recording and linking requirements of MTD for Income Tax. However, it is only the income and expenses of each business and property income source that must be digitally recorded and linked, meaning the compulsary use of a spreadsheet is minimal. Everything else can be recorded however you please, but it still needs to be specified in Easy MTD prior to being submitted. Whether you choose to do this in Easy MTD by manually typing, copy-and-pasting or digitally linking to a spreadsheet, text or CSV file is up to you.
Using a Non-Excel Spreadsheet
Easy MTD can only import figures held in an Excel XLSX, XLS or XLSM format (and for certain figures, a text or CSV file). Therefore, if you use a non-Excel spreadsheet such as Google Sheets, OpenOffice Calc, or LibraOffice Calc, to record your figures, you will need to save to an Excel file. This is normally a simple matter of selecting the Save As option found on a spreadsheet's File menu, then selecting the Excel option from the list of file types.
Grab an Excel Spreadsheet for Income and Expenses Figures
If you need an Excel spreadsheet to digitally record your income and expenses figures, you can head over to the download page and grab one for self-employment, UK property and foreign property income sources. You can then digitally link to this spreadsheet using Easy MTD, extract the figures and submit an associated quarterly update to HMRC.
Keep Your Spreadsheets and Say No to Accounting Software
If you're already familiar with them, spreadsheets are a quick and easy way to get up and running with MTD for Income Tax. No time wasted learning complicated accounting software. More time concentrating on your core business.