Best MTD Software Comparison: Bridging vs Accounting Software

With Making Tax Digital (MTD) for Income Tax approaching, you need to choose software to submit your quarterly updates to HMRC.

A quick search will show you dozens of options, but they generally fall into two categories: Full Accounting Software and Bridging Software. Choosing the right one depends entirely on how you prefer to run your business.

Full Accounting Software vs. Bridging Software

Before comparing specific brands, it is important to understand the difference between the two main approaches to MTD.

Full Accounting Software (e.g., Xero, QuickBooks, Sage) These are comprehensive platforms that handle everything: invoicing, bank feeds, payroll, and MTD submissions. They are powerful but can be expensive and complex to learn. You must move all your financial data into their system.

Bridging Software (e.g., Abridge, 123 Sheets, VitalTax) Bridging software does exactly what it sounds like: it builds a bridge between your existing spreadsheet (Excel or Google Sheets) and HMRC. It does not replace your spreadsheet; it just securely transmits your final numbers to the government.

Software Comparison

Here is a look at how different types of MTD software compare, especially if you currently use spreadsheets.

1. Abridge (Bridging Software)

Abridge is designed specifically for sole traders and landlords who want to keep things simple. It works with both Microsoft Excel and Google Sheets. You do not need to install any clunky add-ins; it connects securely via the web to pull your quarterly totals and send them to HMRC.

• Pros: Very easy to use, supports Google Sheets, low cost, keeps your current workflow.
• Cons: Not suitable if you need advanced features like automated payroll or complex inventory tracking.

2. Traditional Bridging Tools (e.g., VitalTax, 123 Sheets)

These are older bridging solutions that often function as Microsoft Excel add-ins. They are reliable and get the job done if you are strictly an Excel user.

• Pros: Familiar to long-time Excel users, compliant with HMRC.
• Cons: Often lack support for Google Sheets or Mac users, interface can feel dated.

3. Full Accounting Software (e.g., Xero, Sage, QuickBooks)

These are the heavyweights of the accounting world. They are fantastic for growing businesses with employees, complex VAT requirements, and high transaction volumes.

• Pros: Highly automated, connects directly to your bank account, extensive reporting.
• Cons: Expensive monthly subscriptions, steep learning curve, forces you to abandon your spreadsheets.

Which Should You Choose?

Choose Full Accounting Software if:

• You have employees and need payroll features.
• You process hundreds of transactions a month and need automated bank feeds.
• You want to generate complex financial reports.

Choose Bridging Software (like Abridge) if:

• You are a sole trader or landlord with straightforward finances.
• You already use Excel or Google Sheets and like how they work.
• You want the cheapest, simplest way to comply with HMRC's MTD rules without learning a new system.