Digital bank Monzo has unveiled a significant new feature designed to support the UK's smallest businesses and self-employed individuals with upcoming tax changes.
Simplifying Tax for Sole Traders and Landlords
The bank is introducing a complimentary, HMRC-approved tax tool directly within its app. This move is a direct response to HMRC's Making Tax Digital (MTD) for Income Tax initiative, which will become mandatory from April 2026. The new regulations will require sole traders and landlords with annual business or property income over £50,000 to submit quarterly updates on their income and expenses using approved software.
Monzo's new tool, powered by Sage's embedded services technology, will be fully operational before the new tax year begins on 6 April 2026. It will allow anyone with a free Monzo Business account to file their tax updates directly to HMRC without leaving the banking app.
Industry Leaders Welcome the Move
Jennifer Staves, deputy director of strategic design for Making Tax Digital at HMRC, commented on the development. "Making Tax Digital for Income Tax will help people keep clearer records and get their tax right," she said. "Using software which has been recognised and approved by HMRC will make it easier for sole traders and landlords to meet the new requirements and be ready ahead of April 2026."
Jordan Shwide, general manager at Monzo Business, acknowledged the anxiety the changes have caused. "Making Tax Digital is designed to make tax simpler, but we know many sole traders feel overwhelmed by what these changes mean for them," Shwide stated. "By launching a free, HMRC-recognised tax tool, in partnership with Sage, we're making it easier for sole traders to send tax updates straight from their bank account, so they can feel stress-free and confident in April."
A Partnership to Reduce Administrative Friction
The collaboration with accounting software giant Sage is central to the offering. Gordon Stuart, SVP of fintech and embedded services at Sage, emphasised the goal of simplifying complex processes. "For small businesses, tax can often feel more complicated than it needs to be," Stuart noted. "By embedding trusted tax and compliance tools into everyday banking, we're helping simplify tax and reduce friction, so people can feel more confident as Making Tax Digital approaches."
This initiative positions Monzo as a proactive player in the business banking sector, aiming to alleviate a major administrative burden for its customers ahead of the legislative deadline.
