Quick answer
No. MTD for Income Tax requires digital records, not bank feeds. But a bank feed saves time, because your transactions appear in your software automatically and you just categorise them. You still need to check and categorise every transaction, and add anything that doesn’t go through the bank.
Key facts
Not a legal requirement
Brings transactions into your software automatically
You still categorise and check each one
Cash and personal-card spending still need adding
How they work
You give your software read-only access to your business bank account through open banking. New transactions appear in the software, ready to categorise. You may need to reconnect the feed from time to time.
What feeds don’t do
Decide whether a payment is business or personal
Record cash income or expenses
Capture business costs paid from a personal card
Replace receipts as evidence
Without bank feeds
You can type transactions in, or import bank statements as CSV files, as long as the records end up in compatible software or a digitally linked spreadsheet.