123 Sheets
Cheap bridging software for spreadsheet users.
by 123 Sheets
Best for people who've kept their own spreadsheets for years and just need the legal submission step.
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Overview
123 Sheets is a low-cost bridging tool, keep your records in Excel, it handles the HMRC submission. No bells, no whistles, just cheap compliance.
123 Sheets at a glance
How 123 Sheets stacks up on the dimensions that matter when picking MTD software.
Strong for the compliance step itself. HMRC-recognised for both MTD for VAT and MTD for Income Tax, and the whole product is built around the submission journey, no general ledger, no Self Assessment workflow beyond what HMRC asks for.
Minimal. 123 Sheets reads totals from your spreadsheet and submits, it doesn't generate profit and loss, balance sheet, or category breakdowns of its own. Reporting lives in whatever Excel template you keep.
Not a bookkeeping tool. 123 Sheets has no chart of accounts, no double-entry ledger, no reconciliation against bank feeds. You do the bookkeeping yourself in Excel, and 123 Sheets only handles the HMRC submission step. If you want real bookkeeping, pair it with a free accounting tool (QuickFile, Pandle) or skip bridging entirely.
Not supported. 123 Sheets doesn't track stock, SKUs or cost of goods sold. If you sell physical products and need inventory accounting, this is the wrong tool, pick QuickBooks, Xero or Zoho Books instead.
Not supported. There's no concept of projects, jobs or billable engagements in 123 Sheets. Freelancers and consultants who want per-project profit tracking should look at FreshBooks, Xero Starter, or QuickBooks.
Indirect. You record expenses in your spreadsheet however you like, and 123 Sheets submits the totals to HMRC. There's no receipt scanning, no mobile expense capture, no automated mileage tracking. Workable for low-volume traders; tedious at scale.
Not designed for this. There's no bookkeeping output a lender or accountant would normally ask for. If you need cash-flow forecasts, formal management accounts, or audit-ready ledgers for a credit application, a full accounting tool like Xero, QuickBooks or FreeAgent fits better.
A reasonable choice if you're starting a business that's already spreadsheet-shaped, simple income, few expense categories, no employees. £12/yr is the cheapest MTD compliance route. Not a good choice if you'd benefit from invoicing, bank feeds or business banking integrations from day one.
Not applicable, 123 Sheets is a bridging tool with no ESG or sustainability reporting features. UK MTD itself doesn't require sustainability disclosures from sole traders or landlords. If you're a larger business that needs to file sustainability data, you'd be on Sage 50, Xero or a dedicated ESG platform, not bridging software.
Very easy if you already use spreadsheets, there's effectively nothing new to learn beyond linking the workbook and clicking submit. Harder if you don't have an existing spreadsheet habit, since the tool gives you no record-keeping structure of its own.
+Pros
- ✓Very cheap (£12/yr entry)
- ✓Keep using Excel
- ✓No learning curve
−Cons
- ✕Pure bridging, no accounting features
- ✕You still have to maintain the spreadsheet
123 Sheets, frequently asked questions
How much does 123 Sheets cost?+
123 Sheets is one of the cheapest MTD options, roughly £12 to £36 per year depending on the plan, billed annually rather than monthly. There is no permanently free tier, but the annual cost is far below monthly accounting subscriptions like Xero or QuickBooks.
Is 123 Sheets HMRC-recognised for MTD?+
Yes. 123 Sheets is HMRC-recognised for both MTD for VAT and MTD for Income Tax. It appears on HMRC's list of compatible software.
Does 123 Sheets work with Excel spreadsheets?+
Yes, that's the whole point. 123 Sheets is bridging software: you keep your records in Excel (or Google Sheets exported to Excel), and it reads the totals and submits them to HMRC. You don't move to a new accounting system or learn new software.
What reporting features does 123 Sheets have?+
Very little, by design. 123 Sheets is a bridging tool, it submits totals from your spreadsheet to HMRC, but doesn't produce its own profit & loss, balance sheet, or category dashboards. Your reporting is whatever you build in Excel. If you want built-in reports, Xero, QuickBooks or FreeAgent are better fits.
Can 123 Sheets help with business funding or credit applications?+
Not directly. Lenders and brokers usually expect formal management accounts or a clean accounting-software export, which 123 Sheets doesn't generate, it only handles the HMRC submission step. If credit applications are a likely need, pick a full accounting tool (Xero, QuickBooks, FreeAgent) over a bridging tool.
Is 123 Sheets good for landlords?+
It works for landlords who already track rental income in a spreadsheet and just need the MTD submission step. It does no property-specific accounting, no per-property profit and loss, no rent tracking. If you want those, a landlord-focused tool like Hammock fits better; if you just want cheap compliance, 123 Sheets does the job.
What are 123 Sheets' main features?+
MTD bridging for Income Tax and VAT, an Excel-based workflow, annual billing at £12–£36, and HMRC recognition. That's deliberately the whole list, it doesn't include bank feeds, receipt scanning, invoicing, or accounting reports. The pitch is cheap compliance for people who already keep records in spreadsheets.
What are the alternatives to 123 Sheets?+
Other bridging tools include VitalTax (free tier, runs inside Excel) and My Tax Digital (free). If you want full accounting rather than bridging, QuickFile and Clear Books have free tiers. See our spreadsheet-user comparison for the full bridging shortlist.