Global: Monzo rolls out free in-app tax filing tool ahead of April MTD changes

UK digital bank Monzo has introduced a free tax filing tool for sole traders and landlords as the country prepares for significant changes under the Making Tax Digital (MTD) for Income Tax regime, set to take effect in April.

Under the new rules, sole traders and landlords will be required to submit quarterly updates on income and expenses using HMRC-approved digital systems. While awareness of the changes is relatively high, readiness remains a concern. A Monzo survey of 2,000 small business owners found that seven in 10 sole traders know about the upcoming MTD requirements, yet more than a quarter do not feel confident they will be prepared in time. The research also indicates that UK small businesses collectively spend almost £5 billion each year on tax and accounting software.

With more than 800,000 business customers, Monzo says it is responding to this challenge by launching an HMRC-recognised tax tool that is free to use. Powered by Sage’s embedded services technology, the solution is available to customers with a free Monzo Business account ahead of the new tax year starting on April 6.

The new feature enables eligible users to submit tax updates directly to HMRC from within the Monzo app, offering a streamlined, in-app option for those with straightforward tax needs.

Jordan Shwide, General Manager of Monzo Business, said the initiative is aimed at reducing anxiety around the transition to digital tax reporting. “Making Tax Digital is intended to simplify tax, but many sole traders feel overwhelmed by what the changes mean in practice. By launching a free, HMRC-recognised tool in partnership with Sage, we’re helping customers send tax updates straight from their bank account and approach April with greater confidence,” he said.