Monzo launches free HMRC-recognised tax tool for 800,000 business customers

Monzo will offer a free, HMRC-recognised tax tool powered by Sage to its business customers ahead of Making Tax Digital for Income Tax starting in April; Monzo’s research estimates UK small businesses spend about £4.8bn a year on tax and accounting software.

Monzo is introducing a free, HMRC-recognised tax tool for its business customers as UK tax rules change. The bank said the tool, built with Sage's embedded services, will allow Monzo Business account holders to submit tax updates to HMRC through the Monzo app. The change comes ahead of HMRC's Making Tax Digital for Income Tax reforms, which require sole traders and landlords to use approved digital systems for quarterly updates. Monzo's own research estimates UK small businesses collectively spend about £4.8 billion a year on tax and accounting software. Key details: - Monzo reports it has over 800,000 business customers. - The tax tool is HMRC-recognised, powered by Sage's embedded services, and will be fully operational before the new tax year begins on April 6. - The tool will be accessible across free and paid Monzo Business account plans and offers in-app filing for basic tax updates to HMRC. - The research behind the announcement was carried out by Censuswide, surveying 2,000 small business owners between 15 and 23 December 2025. - Using an average monthly spend of £71 on tax tools and the UK Government’s 2025 estimate of 5.64 million small businesses, Monzo’s analysis reached an annual figure of about £4.8 billion. - The survey found 52% of sole traders find managing business taxes stressful, 44% admitted to filing late because the process was confusing or time-consuming, and sole traders spend on average about 25 hours a year on tax administration. Summary: The Monzo tax tool is presented as a straightforward, in-app option for basic tax filing as Making Tax Digital for Income Tax begins its phased rollout. HMRC’s MTD timetable starts in April 2026 for those above the £50,000 threshold, with further deadlines in April 2027 and April 2028 for lower thresholds. Many businesses will continue to use fuller accounting software or professional advice as their needs grow.