Digital bank Monzo has introduced a new HMRC-recognised tax tool ahead of changes to tax rules in April.

The new Making Tax Digital for Income Tax changes will require sole traders and landlords to use approved digital systems to submit quarterly income and expenses updates.

The new tool, powered by Sage’s embedded services technology, enables anyone with a free Monzo Business account to submit tax updates directly to HMRC from the Monzo app.

The digital bank first announced plans for the rollout of the built-in tax filing tool in October last year.

At the time, the company opened the waitlist for the tool ahead of the full launch this month.

The move comes as Monzo data shows that while 70 per cent of sole traders are aware of the upcoming rules, 28 per cent say they’re not confident they’ll be ready for April.

“Making Tax Digital is designed to make tax simpler, but we know many sole traders feel overwhelmed by what these changes mean for them,” said Jordan Shwide, general manager, Monzo Business. “By launching a free, HMRC-recognised tax tool, in partnership with Sage, we’re making it easier for sole traders to send tax updates straight from their bank account, so they can feel stress-free and confident in April.”

Jennifer Staves, deputy director, strategic design: Making Tax Digital, at HMRC, said that the new rules will help people keep clearer records and "get their tax right."

"Using software which has been recognised and approved by HMRC will make it easier for sole traders and landlords to meet the new requirements and be ready ahead of April 2026," continued Staves.

---