Monzo launches new tool to help businesses meet upcoming digital tax rules

British digital bank Monzo is launching a new built-in tax filing tool for sole traders and landlords.

Sole traders and landlords using the digital bank’s services will soon be able to file directly to HMRC from their Monzo Business bank account.

The new tool, built in partnership Sage, is designed to help businesses comply with the upcoming Making Tax Digital for Income Tax legislation.

From 6 April 2026, sole traders and landlords will be required to keep digital records and submit quarterly tax updates to HMRC, using approved software.

Monzo said that the new tool is designed to prepare sole traders and landlords for the changes and “help reduce the complexity and cost of tax compliance.”

Businesses will be able to file tax in the same place they already track their money, pay bills and run their business finances.

The move builds on Monzo’s existing tax features, including categorising spend on the go, attaching receipts, and setting aside money for tax bills.

The tool is powered by embedded services technology which enables banks, FinTechs and software platforms to build accounting and other capabilities directly into their products.

“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.”

The waitlist for the new tool has opened, with the full launch expected in time for the new tax year when Making Tax Digital comes into effect.

Monzo’s plans for its business arm come after data from the Current Account Switch Service (CASS) showed that the neobank experienced the highest net current account switch gains for SMEs and charities last year.

In 2024, Monzo had 3,957 organisations switch their current accounts to the digital bank.

Lloyds Bank came in second place, with 1,251 switching to the incumbent, while NatWest was in third with 856 gains.