What MTD asks for, in plain terms
Making Tax Digital changes how records are kept and how returns reach HMRC. Records must be digital, the link from those records to the submission must itself be digital rather than retyped, and the filing must go through compatible software.
For VAT this is settled: VAT-registered businesses keep VAT records and file VAT returns using compatible software. For income tax it is arriving in phases, and the first one has already happened — see the dates below.
What the rules do not do is tell you how a PDF statement from a bank with no feed becomes a digital record. That is a practical problem, it lands on the business or the bookkeeper, and it is what this page is about.
Being explicit: we do not file anything
FlowParse is not HMRC-recognised Making Tax Digital software. It does not submit VAT returns, does not send quarterly updates, does not connect to HMRC's systems, and it is not bridging software.
It converts documents into structured data. You then put that data into whatever MTD-compatible system you already use — an accounting package, or software your accountant runs — and the filing happens there, by the software HMRC recognises for it.
We would rather state that in the second section than let anyone discover it at a deadline. If you need a recognised filing route, HMRC publishes a list of compatible software, and that list is where to look.
Where MTD currently applies
The VAT position is straightforward: VAT-registered businesses should be signed up and filing VAT returns through compatible software with digital record keeping.
For income tax, HMRC's published phasing is by qualifying income from self-employment and property. The first phase is live now, which is why the question of how statements become digital records has become urgent for a large number of sole traders and landlords rather than a theoretical concern.
| From | Who is brought in | What it means in practice |
|---|---|---|
| Now | All VAT-registered businesses | Digital VAT records, filing via compatible software |
| 6 April 2026 | Qualifying income over £50,000 | Digital records plus quarterly updates to HMRC |
| April 2027 | Qualifying income over £30,000 | Same obligations, wider population |
| 6 April 2028 | Qualifying income over £20,000 | Measured on 2026-27 qualifying income |
What a quarterly update actually needs
A quarterly update is a summary of income and expenses for the period, sent from digital records through compatible software. It is not a return and not a tax calculation — but it does require the underlying quarter to exist as data, on time, four times a year.
That changes the rhythm of bookkeeping more than the technology does. A business that used to gather everything once a year now needs each quarter closed within weeks of its end, which is precisely the shift that makes statement conversion a routine rather than an annual rescue.
The practical consequence: whatever accounts do not have a feed become a recurring quarterly task, and they are the ones worth automating first.
Where PDFs still come from
Bank feeds cover the main accounts and rarely all of them. Four gaps recur, and none of them are unusual.
History before the feed existed — a feed starts when it is connected and does not backfill, so anything before that arrives as statements. Closed accounts — once closed there is nothing to connect, and the statements are the only record. Institutions with no feed — smaller banks, foreign accounts, some cards and fintech products. And broken connections — a feed that silently stopped in February leaves a hole nobody notices until the quarter will not reconcile.
Every one of those is a PDF problem sitting inside a digital-records requirement.
Digital records, and the retyping question
The spirit of the rules is that data should move without being retyped, because retyping is where errors enter. Copying a figure from a PDF into a spreadsheet by hand is exactly what the digital-record requirement is designed to discourage.
Extraction sits comfortably on the right side of that line: the statement becomes structured data as a file, and that file is imported into your accounting software rather than typed. The data path is digital from the point of conversion.
Where the boundary sits precisely for your setup — particularly what counts as an acceptable link between systems — is a question for your accountant or your software provider, because it depends on the chain you are running, not on any single tool in it.
A workflow that fits the rules
Connect every feed you can
A feed from the bank is always better than a document; use it wherever it exists.
List the accounts with no feed
Historic periods, closed accounts, foreign accounts, unsupported cards.
Convert their statements
Turn each period into structured data with a completeness check per statement.
Import as a file
Load the result into your accounting software rather than typing figures in.
Reconcile the quarter
Every account to its statement balance before the update is prepared.
File in MTD software
Your compatible software submits; nothing is sent by us.
What to import, and in which format
Which file your software takes decides the route. Most accounting packages accept OFX-family files or a CSV in a defined shape, and OFX is generally the smoother path because the fields map themselves.
FlowParse produces OFX, QBO and QFX files, a Xero-ready statement CSV, a DATEV booking file for German setups, plus Excel, CSV and Google Sheets.
One detail worth checking whichever you use: transaction identifiers. A file whose rows carry stable ids lets your software recognise what it has already seen, which is what stops an overlapping import double-posting a period.
Digital records that are quietly incomplete
A digital record that is missing four transactions still satisfies the letter of "digital" and fails everything that matters. It is also invisible: the rows that are there are correct, nothing is flagged, and the shortfall only appears when a reconciliation refuses to agree.
Statements carry their own proof, and it is arithmetic: opening balance plus every transaction equals the printed closing balance. That check runs on every statement, per account, with failing rows named — so an incomplete record fails loudly instead of quietly becoming your quarterly update.
Then check the period sequence across the quarter: no gaps between one statement's close and the next one's open. Together these two are the strongest assurance available that your digital records match reality.
If you are starting behind
A significant number of businesses met the first income-tax phase without a full set of digital records — the year was in a shoebox, or in a spreadsheet nobody would call digital records.
The route back is bulk rather than heroic: gather statements for every account and month, convert them in one batch, verify each against its balances, and load the result into the software you will file from. A year across three accounts is thirty-six documents and an afternoon rather than a project.
The catch-up guide covers the whole method including what to do about missing documents, and consolidation covers merging the accounts without double-counting overlapping periods.
If you file for clients
Practices feel this hardest, because quarterly obligations multiply by client count. The bottleneck is rarely the filing — it is assembling each client's quarter, and specifically the accounts that arrive as PDFs.
Batching is what makes it viable: convert every client's non-feed statements in one sitting rather than context-switching per client, then reconcile and file. See the accountants' workflow and batch processing.
For firms with volume, the same conversion is available over an API, so the statement step can sit inside whatever pipeline you already run.
Who this page is for
Sole traders newly in scope
Income over the threshold, quarterly updates, and accounts with no feed.
Landlords
Property income across accounts, often at institutions without feeds.
VAT-registered businesses
Digital VAT records where some purchases and accounts are PDF-only.
Agents and bookkeepers
Quarterly obligations multiplied across a client list.
This page is not tax advice
The dates and obligations described here are from HMRC's published guidance and are summarised for orientation. Whether you are in scope, from when, on what qualifying income, and what your specific record-keeping obligations are, is a question for HMRC's own guidance and your accountant.
What we can speak to with confidence is the document problem: getting statements that only exist as PDFs into complete, verified, structured data. That is the part we built.
How your documents are handled
Uploads run over TLS, processing happens in EU data centres, the original PDF is deleted immediately after extraction, extracted data is encrypted at rest, and nothing is used to train models — see security. FlowParse is hosted and cannot be self-hosted; if that is a hard requirement, a desktop tool is the honest answer.
What a feed covers and what it does not
Feeds are the better source wherever they exist. The point of this table is to make visible how much of a typical business they do not cover, because that residue is the quarterly work.
| Situation | Bank feed | Statement conversion |
|---|---|---|
| Current transactions, supported bank | Yes — use it | Not needed |
| Months before the feed was connected | No — feeds do not backfill | Yes |
| Account closed during the year | Nothing to connect | Yes |
| Small or foreign institution | Often unsupported | Yes |
| Feed broke and nobody noticed | Gap in the records | Yes — fills the gap |
| Credit card at a separate issuer | Sometimes | Yes when not |
A worked example: a landlord's quarter
A landlord with three properties: one current account with a working feed, a savings account at a building society with no feed, and a card used for repairs at an issuer the software does not support.
The feed handles the main account automatically. The other two are six statements a quarter, converted in one batch in a few minutes, each checked against its own closing balance, then imported as files rather than typed.
The one that would have caused trouble is the building society: two rental deposits went there directly during the quarter, and without the statements they would simply have been absent from the digital records — not visibly wrong, just missing income.
Total quarterly overhead: about fifteen minutes, repeated four times a year, and the records are complete rather than mostly complete.
Choosing the software you will file with
Since the filing must go through recognised software, that choice is the important one and it is not ours. HMRC publishes lists of compatible software for VAT and for Income Tax, and the sensible approach is to start there rather than from a feature comparison.
Two practical criteria are worth weighing beyond price. Which of your bank accounts it can connect to directly — because every account it cannot connect to becomes recurring manual work. And what file formats it will import, since that determines the route for everything the feeds miss.
Ask your accountant before deciding, too. If they will be filing on your behalf, using what their practice already runs removes an entire category of friction.
What changes day to day
The rules describe obligations; the daily reality is a change of rhythm. Records that used to be assembled once a year now need to be current within weeks of each quarter ending, which is less about technology than about habit.
The businesses that find this painless are the ones that made the non-feed accounts a standing routine: statements downloaded the day they are issued, converted in a batch, imported, reconciled. Fifteen minutes, four times a year.
The ones that find it painful are those still treating each quarter as a small annual crisis. The work is the same; the difference is whether it is scheduled or discovered.
Why landlords feel this first
Property income brings a particular shape of problem into MTD: rent often arrives at whichever account was convenient when the tenancy started, costs are paid from a mix of personal and business accounts, and the institutions involved are frequently ones no accounting software connects to.
The consequence is that a landlord's digital records are usually incomplete by default rather than by neglect — the main account is connected and the rest is not. Quarterly obligations then expose exactly the accounts nobody was tracking.
The fix is unglamorous: list every account that touches property income or costs, convert the ones with no feed each quarter, and keep a property column so income and costs stay attributable. It is fifteen minutes a quarter and it is the difference between records that are complete and records that look complete.
Several businesses, or a business and property
Qualifying income can come from more than one source at once — a trade and a rental, or two separate self-employments — and the records for each have to stand on their own even when the money lands in the same account.
Practically, that means an activity column from the start rather than an attempt to separate later. A shared account can be split by transaction; a merged dataset with no source marker cannot be reliably unpicked.
How the sources are reported, and how a genuinely shared cost should be apportioned, is a question for your accountant. What this workflow guarantees is that the underlying transactions are complete and attributable, which is the precondition for any answer they give.
The boundary, stated plainly
FlowParse turns documents into data. It does not compute your tax, decide what is deductible, apply a rate, issue a form or file anything with any tax authority. Those are decisions about your circumstances and the law where you live, and they belong to you and your accountant.
It is also worth being precise about what a bank statement proves. It proves a payment happened: this amount left this account on this date, to this counterparty. It does not prove what was bought, whether the cost was for the business, or how much tax was inside it. For anything where the tax authority wants to see the nature of the expense — a VAT or sales-tax claim above all — the invoice or receipt is the evidence and the statement is the corroboration.
What that leaves is still the slowest part of the job: getting a year of transactions out of PDFs, complete, correctly signed, in one sortable place. That is what this page is about.
The first thing to do
Write down which of your accounts have a working feed and which do not. That list, not the software choice, is what determines how much quarterly work you are actually facing.
Then convert one statement from the worst account on that list and check it against its closing balance. If that works, the quarterly routine is a batch conversion and an import — and the deadline stops being the thing that decides your week.
Turn PDF-only accounts into digital records
Convert the statements no feed can reach, prove each one is complete, and import the file into the MTD software you already file with.