Powered by Sage technology, Monzo Making Tax Digital in-built tax filing tool will enable sole traders and landlords to file taxes directly to HMRC from their Monzo Business bank account, as HMRC’s new rules come into effect in April 2026.
Monzo, one of the UK’s leading digital banks with more than 700,000 business customers, has taken a major step toward simplifying tax compliance for small business owners. The bank has introduced a new tool that allows sole traders and landlords to file their taxes directly to HMRC from within their Monzo Business accounts.
Developed in partnership with accounting software leader Sage, this feature comes just ahead of the UK’s Making Tax Digital for Income Tax (MTD for ITSA) rollout in April 2026. This significant regulatory shift will require millions of sole traders and landlords to submit quarterly digital tax updates instead of annual returns.
From April 2026, HMRC will require affected taxpayers earning over £50,000 to maintain digital financial records and use compatible software to send quarterly income tax reports. This represents a major change from the traditional once-a-year tax submission and is expected to bring both benefits and challenges. While the system aims to reduce errors and improve transparency, many self-employed individuals remain unprepared. Sage research indicates nearly half are unaware of the new rules, and over half worry about the added administrative workload.
Monzo’s integration with Sage directly addresses these concerns. By allowing users to manage, prepare, and file taxes all within their banking app, the platform eliminates the need for additional accounting software or manual data entry. Everything happens in one place, from categorizing expenses and storing receipts to setting aside money for tax payments and, soon, submitting filings to HMRC. The process is designed to be as seamless as sending a payment, with clear guidance, reminders, and timelines to help users adapt to the new system.
For small businesses, this move represents more than a new feature — it signals a growing shift toward “embedded finance,” where essential financial tasks like accounting and tax compliance happen inside the same apps people already use daily. For Monzo, it reinforces its ambition to be the go-to financial hub for small business owners. And for Sage, it highlights the company’s strategy of making its technology available through trusted digital partners rather than as a standalone service.
As the April 2026 deadline approaches, Monzo and Sage’s collaboration could play a pivotal role in helping small businesses transition smoothly into the UK’s digital tax future: saving time, reducing stress, and keeping them compliant with minimal effort.
