MTD for Income Tax on a Budget The Cheapest Way to Stay Compliant in 2026

With MTD for Income Tax becoming mandatory from 2026, affordability is now a major concern for many businesses.

Subscription-based software can significantly increase annual expenses, especially for those with simple bookkeeping needs.

The good news?
There is a far cheaper way to comply.

This guide explains the most budget-friendly MTD approach — and why bridging software like MTD Sheets helps taxpayers stay compliant without unnecessary costs.

1. MTD Does Not Require Subscription-Based Software

HMRC allows:

• •Digital record keeping in Excel
• •Quarterly updates submitted using bridging software

This means you can continue using your existing spreadsheets.
There is no requirement to adopt expensive bookkeeping platforms.

2. Why Subscription Software Is Often Unnecessary for MTD

Most cloud bookkeeping systems require:

• •Fixed monthly fees
• •Ongoing commitments
• •Training or onboarding
• •Adapting to system constraints

Over a year, these subscriptions can add up to several hundred pounds, even if the user only requires them for MTD submissions.

For small businesses with simple record keeping, these costs are often unjustified.

3. Why Bridging Software Is the Cheapest MTD Method

Bridging software focuses only on what MTD actually requires:

• •Capturing final totals
• •Transmitting them to HMRC
• •Maintaining digital links
• •Keeping the process simple

No subscription

You pay only per submission.

No training needed

If you use Excel, you already have everything you need.

No unwanted features

You avoid paying for invoicing, automation or reporting tools you may never use.

No long-term commitments

Budget-friendly and predictable.

This keeps annual MTD costs dramatically lower than subscription alternatives.

4. Why MTD Sheets Is the Smart Budget Choice for 2026

MTD Sheets is specifically designed for:

• •Self-employed taxpayers
• •Landlords
• •Tradespeople
• •Micro-businesses
• •Accountants with multiple clients

Very low-cost digital submissions

Your annual MTD costs remain minimal.

Professionally built

Developed by chartered accountants for accuracy and compliance.

Fits any spreadsheet

No need to restructure your data.

Works on desktop or mobile

Submit from anywhere.

Guest submissions available

No sign-up required.

This combination of flexibility and low cost makes MTD Sheets ideal for budget-conscious taxpayers.

5. How to Keep MTD Expenses Down

To stay compliant at the lowest possible cost:

1. •Maintain your bookkeeping in Excel
2. •Use bridging software only when submitting
3. •Avoid unnecessary software subscriptions
4. •Keep your workflow simple

This approach can reduce MTD compliance costs to a fraction of what full software would require.

Final Verdict

If you want the cheapest MTD solution in 2026:

Excel for Digital Record Keeping + MTD Sheets for Digital Submissions.

It is the most practical and cost-effective way to comply.