Monzo launches free tax tool ahead of new regulations

In light of the upcoming tax changes in the UK, which will come into effect in April, British digital bank Monzo has introduced a new tool that allows sole traders and landlords to file their taxes directly from their business account—straight to HMRC.

The new Making Tax Digital (MTD) rules for income tax will require sole traders and landlords to use approved digital systems and report their income and expenses on a quarterly basis.

A Monzo survey of 2,000 small business owners found that 7 in 10 sole traders are aware of the upcoming changes, but more than a quarter admit they do not feel ready for April. What's more, the data shows that UK small businesses currently spend nearly £5 billion a year on accounting and tax software.

Monzo, which already serves over 800,000 business customers, has decided to address these concerns. Ahead of the new tax year on April 6, the bank launched a free HMRC-approved tax tool. The solution was developed in collaboration with Sage and uses their embedded services technology.

With this tool, any user of a free Monzo Business account can send tax updates directly to HMRC from within the Monzo app. It is a simple settlement option in the app, designed for basic, uncomplicated needs.

Jordan Shwide, General Manager at Monzo Business, comments: "Making Tax Digital is supposed to simplify taxes, but we know that for many sole traders, these changes are simply overwhelming. By introducing a free HMRC-approved tax tool, in partnership with Sage, we are making it easier for entrepreneurs to send tax data directly from their bank account. We want them to be able to approach these changes calmly and with greater confidence in April."