UK-based Lloyds Bank, part of Lloyds Banking Group, has launched a free Making Tax Digital (MTD) for Income Tax tool for small businesses, embedded directly into the Lloyds Business Account. The tool is powered by BankiFi's technology platform and is available exclusively to Lloyds Business customers at no cost and with no subscription fee.
The launch addresses new regulatory requirements that came into force on 6 April 2026, under which sole traders and landlords are required to keep digital records and submit quarterly reports to HMRC. The tool is HMRC-recognised and enables businesses to meet these obligations directly within the Lloyds banking app, without requiring a separate accounting subscription.
Capabilities and compliance functionality
The integrated tool allows small businesses to move from spreadsheet-based accounting to a fully digital solution linked to their bank account. Functionality includes digital record-keeping, quarterly updates to HMRC, estimated tax views, and end-of-year filing. BankiFi's platform has been integrated directly into Lloyds' Business Account infrastructure, allowing the tool to operate within the existing banking environment rather than as a standalone application.
Lloyds' BCB client strategy and commercial director, Ruchir Rodrigues, said the tool was designed to give small businesses a simple, cost-effective way to manage tax administration. By working with BankiFi to embed the organisation's 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.
Regulatory and market context
The MTD for Income Tax regulations represent a significant expansion of HMRC's digital tax reporting programme, extending mandatory digital record-keeping and quarterly reporting to sole traders and landlords for the first time. The April 2026 implementation deadline created a compliance requirement for a large segment of the UK's small business and self-employed population, many of whom have historically managed their tax obligations through manual or spreadsheet-based processes.
Embedding a compliant MTD tool directly within a business banking account addresses a practical barrier for this segment, namely the cost and complexity of adopting separate accounting software. By offering the functionality at no additional charge within an account customers already hold, Lloyds is reducing the friction associated with compliance while deepening the utility of its Business Account proposition. For BankiFi, the integration with Lloyds represents a significant distribution opportunity for its embedded banking technology platform within one of the UK's largest business banking providers.
