Lloyds Banking Group and BankiFi have launched a free Making Tax Digital (MTD) for Income Tax tool for UK small businesses. The tool is integrated into the Lloyds Business Account and is available to Lloyds Business customers without a subscription fee.
Lloyds Banking Group, which said it supports around one million UK businesses and serves more than 28 million customers overall, including over 23 million digitally active users, developed the service together with Manchester-headquartered BankiFi, which provides technology platforms for banks focused on small business banking services.
The service is based on BankiFi’s technology platform and is designed to help sole traders and landlords comply with Making Tax Digital for Income Tax requirements that took effect on 6 April 2026. Making Tax Digital (MTD) for Income Tax is a UK government programme introduced by HM Revenue & Customs (HMRC) that changes how some sole traders and landlords report income and expenses.
Under the rules that took effect on 6 April 2026, sole traders and landlords with more than £50,000 in qualifying annual income from self-employment or property must use the system. The liability threshold is based on gross income before expenses. Instead of filing information once a year using traditional Self Assessment, the new rules oblige affected taxpayers to keep digital records and send quarterly updates to HMRC using compatible software.
According to Lloyds and BankiFi, their new jointly-developed tool allows users to keep digital records, submit quarterly updates to HMRC, view estimated tax positions and complete end-of-year filing through the Lloyds banking app. The companies said the tool is HMRC-recognised and is intended as an alternative to spreadsheet-based accounting processes.
Ruchir Rodrigues, BCB Client Strategy & Commercial Director at Lloyds, said: “Small businesses are looking for simple, cost-effective solutions that save time. By working with BankiFi to embed our Making Tax Digital tool within the Lloyds Business Account for free, customers can manage their tax administration directly within their banking app, without needing a separate accounting subscription.”
The zero-cost nature of the new offer is a life-saver for many affected taxpayers. Some sole traders and landlords may struggle with the cost and complexity of using commercial software, especially those without accountants or with low liquidity businesses. Besides, due to the early stage of the new rules implementation, there’s a lot of confusion about how the new tax reporting system works in practice. When the reporting tool comes in familiar banking environment, tax payers at least avoid the necessity to master a completely new platform.
Mark Hartley, CEO of BankiFi, added: “This partnership is about delivering exactly what small businesses need, and in turn making Lloyds the best bank for businesses. Our platform enables Lloyds to quickly introduce the functionality customers want, while creating the foundation to continuously evolve their proposition in line with changing customer demand.”
Similar tool was earlier introduced by UK’s digital challenger Monzo. Its digital banking services are used by 800,000 businesses in the UK. Per latest statistics, there are approximately 5.7 million private businesses operating in the country. However, the number of business owners qualified for MTD filing is much smaller – about 864,000.
