Digital bank Monzo has joined forces with Sage to simplify tax filing for sole traders and landlords with a new tool that allows them to file directly to HMRC from their Monzo Business bank account.
Monzo's new product, built in collaboration with Sage, a company providing accounting, financial, HR, and payroll technology to small and medium-sized enterprises (SMEs), is developed to support sole traders and landlords in falling in line with the upcoming Making Tax Digital for Income Tax legislation.
Led by HMRC, Making Tax Digital is an initiative that will require sole traders and landlords to keep digital records and submit quarterly tax updates to HMRC, utilising approved software. According to recent research from Sage, approximately half of sole traders still don’t know much about the initiative, while 55% of those who are aware fear the administrative complexities of submitting such updates.
Monzo’s new offering
Based on this data, Monzo decided to launch an intuitive tool that prepares sole traders and landlords for these changes and allows them to reduce the complexity and cost of tax compliance. Among the upcoming benefits, Monzo mentions:
- User-friendliness, with tax filing done more optimally through Monzo;
- Direct filing to HMRC, with Monzo connecting customers directly to HMRC by integrating Sage’s technology. This mitigates the need for separate software;
- Unified tool that enables customers to file taxes in the same place they already track their money, pay bills, and run their business finances;
- Optimised tax management, with the tool complementing Monzo Business’s other tax capabilities, including categorising on the go, attaching receipts, and setting aside money for tax bills;
- Clear procedures, with customers on the wait list receiving simplified explainers, timelines, and reminders to support them in preparing for Making Tax Digital.
Furthermore, the tool is supported by Sage Embedded Services technology, which allows banks, fintech companies, and software platforms to build accounting and other features directly into their products. Integrating Sage technology directly into platforms like Monzo enables the company to respond to the scaling demand from small businesses for all-in-one solutions that function within the apps they are already familiar with and using.
As mentioned by Monzo, the waitlist for its built-in tax filing tool is open as of 14 October 2025. The full rollout is projected to come in time for the next tax year, when Making Tax Digital will come into effect. In order to access the new tool, customers need to hold a Monzo Business account.
