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Coming soon to Xero: Bridging software for Making Tax Digital

Posted 5 months ago in Product by Damon Anderson
Posted by Damon Anderson

With the Making Tax Digital (MTD) for VAT mandation date just weeks away, we’re pleased to announce that we’re adding a bridging software solution to our suite of MTD-ready products.

MTD for VAT becomes compulsory for most VAT registered businesses with a taxable turnover above the £85k VAT threshold from 1 April 2019.

But with more than a million businesses affected by the new scheme, many accountants are struggling to convert clients to MTD-compatible software in time.

How Xero’s new bridging software can help

We’ve been gathering feedback from accountants and businesses to address these concerns so we can offer the right solution. We’re pleased to be able to offer bridging software that helps you and your clients get ready for MTD as seamlessly as possible.

We will be incorporating this new easy-to-use feature as part of Xero’s MTD solution. It will be available soon to give you enough time to get any remaining clients over the line.

How it’s going to work

Your clients will still be able to use a spreadsheet to calculate VAT and keep digital records. Our bridging software will allow them to upload VAT figures directly from the spreadsheet into Xero where you can submit your clients MTD VAT return securely and in real-time to HMRC.

The bridging software solution will be available in all Xero plans that support VAT. Please note that the bridging software solution is not available for those on the Flat Rate Scheme.

As well as ensuring compliance, Xero’s suite of MTD-ready products have built-in functionalities that will save you and your clients precious time when it comes to VAT. Features include:

  • Knowing which VAT Returns are due
  • Keeping a history of the VAT Returns that have been filed
  • Calculating how much VAT is due
  • Identifying the method of payment and
  • Posting VAT Returns in real time.

Resources to help you with MTD

We’ll be sure to keep you in the loop with the progress of the product so please make sure you regularly check our Making Tax Digital resource hub for updates. There are tons of free guides and toolkits. We recommend you check it out and utilise these resources.

Our bridging software solution is just part of our suite of MTD-ready products that will help you fulfil your MTD for VAT obligations. If you’re a Xero partner, you and your clients that meet the latest criteria set out by HMRC can join Xero’s MTD for VAT beta programme now. For more information speak to your account manager or email


Erica Mellett
March 28, 2019 at 12.27 am


We have two companies on Xero that are both VAT registered but file under a Group VAT. Currently we export the VAT information into a spreadsheet and file the VAT Manually outside of Xero (but keeping the VAT returns as “Published” in Xero individually).

From reading this blog, Xero now has a solution to this with Bridging Software so that we file digitally with HMRC from Xero. Could you please advise how I can access piece of software and instructions on how to use it.

Damon Anderson in reply to Erica Mellett
April 5, 2019 at 1.38 am

Hi Erica,

Customers with VAT Groups, who wish to maintain digital links for MTD, can use our bridging solution. This means a customer can combine groups together in a spreadsheet, connect this back into Xero and file a consolidated return. Bridging is currently available for Xero partners (accountants or bookkeepers) and will be extend to all customers on a VAT-enabled product soon. Thanks

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