The tool – aimed at sole traders and landlords – will let them file directly to HMRC from their Monzo Business bank account – ahead of the Making Tax Digital (MTD) for Income Tax initiative, that’s due to be rolled-out.
Making Tax Digital (MTD) for Income Tax is a new system being phased in by HMRC that requires self-employed individuals and landlords to keep digital records of their income and expenses. It replaces the annual Self-Assessment tax return with mandatory quarterly updates and a final declaration, using approved software.
Over the next three years, almost 3 million sole traders and landlords must switch to third-party digital tax tools.
This is a phased rebuild of the UK tax system. From April 2026, sole traders and landlords earning over £50,000 will fall in scope. Those earning over £30,000 and over £20,000 will need to comply with MTD by April 2027 and April 2028 respectively.
Sage research – conducted in September 2025 with 1,000 self-employed/sole traders in the UK not registered for VAT – shows that almost half (49%) of sole traders are still unaware or don’t know much about Making Tax Digital, while over half (55%) of those that are aware, fear the administrative burden of submitting quarterly updates. Monzo’s simple and intuitive tool is designed to prepare sole traders and landlords for the changes and help reduce the complexity and cost of tax compliance.
Key benefits:
- Easy-to-use. This is tax filing, the Monzo way – delightfully simple and done in just a few taps
- Direct filing to HMRC. Monzo will connect customers directly to HMRC, by embedding Sage’s innovative and trusted technology, so there’s no need for separate software
- In one place. Customers will be able to file tax in the same place they already track their money, pay bills and run their business finances – no toggling between tools or juggling spreadsheets
- Simplified tax management. The tool complements Monzo Business’ other simple tax features, like categorising spend on the go, attaching receipts, and setting aside money for tax bills – so customers can prepare, save for and soon file taxes, in one place
- Clear, simple steps. Customers on the waitlist will receive clear, bite-size explainers, timelines and reminders to help them prepare for Making Tax Digital
“Managing taxes is one of the biggest headaches for sole traders and landlords,” said Jordan Shwide, General Manager, Business Banking at Monzo. “That’s why we’re making tax filing simple with a built-in tool, powered by Sage, that lets customers file directly to HMRC from their Monzo Business bank account. This is yet another step in building the one app that helps small and growing businesses confidently manage all of their business finances with Monzo.”
Monzo’s tax filing tool is powered by Sage Embedded Services technology, which enables banks, fintechs and software platforms to seamlessly build accounting and other capabilities directly into their products.
“For small businesses, tax can feel complicated, but through our embedded accounting technology and our partnership with Monzo we are making tax compliance simple and seamless inside the app they already use to run their finances,” said Gordon Stuart, SVP, Operations, Fintech & Embedded Services, Sage. “This collaboration is a clear example of Sage Embedded Services in action, meeting customers where they are and enabling partners to deliver trusted services in the tools business owners already use every day.”
The full launch of this tool expected in time for the new tax year when Making Tax Digital comes into effect. Customers must have a Monzo Business account to access the tool. For more information, please visit: monzo.com/business-banking/features/making-tax-digital
Only sole traders or limited company directors in the UK can apply. Ts&Cs apply.
For more information, also: makingtaxdigital.campaign.gov.uk/ and sage.com/en-gb/sage-embedded-services/
