What is bridging software?

Definition of bridging software

Bridging software is a tool which links business records to HMRC’s systems in an Making Tax Digital (MTD)-compliant manner.

The government’s MTD initiative requires affected businesses to submit their VAT returns digitally. Keeping records via spreadsheets and manually entering these into the Government Gateway is not sufficient to meet the requirements of MTD.

Cloud accounting software, such as FreeAgent, provides an all-in-one solution for maintaining and submitting MTD compliant business accounts. However, businesses which choose to keep their records via other methods, such as spreadsheets, require additional software in order to submit their VAT returns in a compliant manner.

Bridging software provides a digital link between data stored in spreadsheets and HMRC’s portal. This link allows the data to be submitted digitally, making the VAT return compliant with MTD.

On its own, however, bridging software does not fulfill the other requirements of MTD, such as digital record keeping and maintaining digital links between data. Additionally, you or your accountant may have to perform further calculations to get spreadsheet data into the format required by the bridging software.

Got questions? Ask Emily!

FreeAgent's Chief Accountant Emily Coltman is available to answer your questions in the comments.

Bookkeeping and tax tips

We are committed to keeping your information safe. Read our Privacy Policy to find out more.

Are you an accountant or bookkeeper?

Find out more about FreeAgent for your practice.