Skip to main content Don't get trapped by bridging software: why spreadsheets won't survive the MTD era
Making Tax Digital (MTD) for Income Tax is now in full swing, and accountants and bookkeepers across the UK are focusing on making quarterly updates manageable for the long term.
If you used bridging software to file your clients’ first quarterly updates, that may have been the practical option for clients who still manage their records in spreadsheets. Bridging tools provide a seemingly easy path: they allow you to meet the filing requirements without changing established client habits or putting pressure on clients to switch to new software at short notice. We get it - sometimes the simplest route feels like the smartest one. But as the post-filing calm sets in and gives you a moment to reflect, it’s worth asking: is bridging software a genuine long-term strategy or simply a one-off solution?
The 2027 threshold drop (and why that changes everything)
Starting April 2026, wave one of MTD for Income Tax applied to sole traders and landlords with qualifying income over £50,000. According to HMRC estimates, around 780,000 taxpayers fell into this cohort.
On 6th April 2027, that threshold will drop to £30,000. That brings another 970,000 taxpayers into scope. That’s a staggering 124% volume jump in one tax year - enough to make even the most zen accountant’s eyes water.
And it doesn’t stop there. On 6th April 2028, the threshold will drop again to £20,000, pulling a massive group of small business and micro-business clients into the MTD ecosystem.
What does this mean? If managing quarterly updates via bridging software felt a little fiddly or time-consuming during the first wave, it’s worth thinking about how that process will feel when your MTD client list gets significantly larger over the next two years. To put it simply, individually wrangling hundreds of spreadsheets is not a scalable solution for your practice.
Instead, the key is to look at the next couple of years as your testing ground. While your £50,000+ clients adapt to the new rules, it’s time to streamline your workflows, test your tech and get your team comfortable with more efficient accounting software. By setting up smoother processes today, you’ll be in the best possible position to handle a higher volume of clients as income thresholds drop.
The hidden costs of bridging software
Bridging software might feel like an easy fix in the short term, but it often brings costs that fly under the radar. FreeAgent polling from May 2025 revealed that 49% of practices remain unsure how much to charge for MTD for Income Tax services.
Much of this uncertainty comes down to managing haphazard client data. When clients maintain manual spreadsheets, teams spend unbillable hours chasing clients, fixing formula errors and clarifying ambiguous numbers just to get the data ready to upload. Bridging software cannot prevent these errors; it can only transmit the spreadsheet it receives. And because it lacks automated bank feeds and real-time tracking, you must repeat that same manual effort every single quarter.
Unbillable hours create classic scope creep. When client volumes go up in 2027, using bridging software in your day-to-day workflow will make it much harder to protect your firm’s bottom line.
Bridging software and compliance
Bridging software technically ticks the box for MTD compliance today. But it leaves a major gap in your regulatory cover: record integrity.
Since bridging tools only transmit spreadsheet summaries, they don’t generate a digital audit trail. If a client overwrites a formula or alters a figure in their spreadsheet, there’s no footprint showing what changed or why. If HMRC ever audits those records, you end up playing detective without a proper explanation to fall back on.
It’s also worth looking at where the industry is heading. The UK is steadily moving towards integrated, digital financial ecosystems, where business data flows seamlessly between suppliers, buyers, practices and tax authorities in real time. Look no further than the government’s consultation on supporting electronic invoicing (e-invoicing).
Whether you analyse your current compliance ecosystem or consider the bigger picture, bridging software consistently falls short of what your practice needs. Moving to cloud-based accounting isn’t just about ticking boxes today; it’s about future-proofing your practice as regulations continue to evolve.
Unlock true peace of mind with FreeAgent
So, if bridging software is the bottleneck, what’s a scalable alternative? FreeAgent is designed to do the heavy lifting for you - automating the time-consuming, manual jobs so you can actually focus on being a strategic partner to your clients. Here is the cheat sheet on how FreeAgent compares to your standard bridging setup:
| Feature | FreeAgent | Bridging software | |
|---|---|---|---|
| Compliance scope | End-to-end HMRC-recognised solution for quarterly updates and final declarations. | Basic solution that submits spreadsheet summaries only. | |
| Practice visibility | Portfolio management via Practice Dashboard to track submission statuses. | Zero central oversight. Teams track spreadsheets individually. | |
| Bulk and automated filing | File quarterly updates, mark submissions as filed in bulk and schedule quarterly updates to be sent to HMRC automatically. | Requires processing each spreadsheet file one by one. | |
| Client data collection | Automated via bank feeds, Smart Capture receipt scanning and rental statement extraction. Bank feed reconsenting ability brings you continuous client data, dramatically reducing manual client chasing. | Requires chasing clients for manual spreadsheet updates up to five times a year for every filing deadline. |
Of course, getting clients to adopt software can be easier said than done - especially if they’ve been using the same system for years. But when MTD thresholds drop and client numbers scale, using software built specifically for ease and efficiency will make all the difference.
While a lot of cloud platforms in the market still require you to submit filings client by client, FreeAgent is designed to cut out that manual effort. With powerful features like bulk filing and bulk client approval requests offered via the Practice Dashboard, along with automated bank feeds and Smart Capture receipt scanning, FreeAgent takes the hassle out of day-to-day admin. And with FreeAgent for Landlords, you can cover multiple property co-owners under one licence without complex manual workarounds.
If that sounds exciting, visit our comparison page to see how FreeAgent stacks up against Xero, QuickBooks and Sage.
True peace of mind doesn’t come from implementing a quick fix for a single deadline. It’s about building a way of working that makes you wonder how you ever managed without it. By choosing FreeAgent, you can guide your clients into 2027 with calm and confidence.
Ready to see how FreeAgent can transform your practice’s workflow? Book a free trial. If you’re already a Practice Partner, speak to your Account Manager for more guidance.
