Making Tax Digital for Income Tax in Monzo Business

UK Monzo Chat Business Banking
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Hi folks :waving_hand:

I’m Chris, a software engineer in the Business Banking team, and I’d like to share a bit about our new Making Tax Digital for Income Tax tool we’ve recently added to the app.

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For anyone that didn’t know, Making Tax Digital for Income Tax is the new way for sole traders and landlords to report income and expenses to HMRC. To help prepare customers, we developed a new tool that allows you to file tax straight from Monzo with free MTD software. This is built into Monzo Business as standard and recognised by HMRC.

If you want to find out a bit more, we’ve a helpful guide over here - What is Making Tax Digital for Income Tax?

:information_source: You can set up Making Tax Digital for Income Tax today, and link your Monzo Business Account to HMRC so that you’re ready for April. You can find this in the ‘Making Tax Digital’ section of the home screen in your Business Account.

What’s coming in the new tax year? :date:

Once the new tax year begins, and you’ve setup Making Tax Digital for Income Tax you’ll see see some new features:

Tax Categorisation: You’ll be able to assign tax categories to your transactions as they happen. You’ll also be able to split transactions across multiple categories if you need to, and mark how much of the transaction is an allowable or disallowable expense.

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Manual Transactions: We know not every business transaction happens inside your Monzo Business account so you’ll be able to manually add transactions to your account. These can be used for logging cash transactions or payments made from another account that need to be included in your tax return.

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If you’ve got any feedback on this feature, we’d love to hear it! Let us know here or use the feedback form in the ‘Making Tax Digital’ screen in the mobile app.

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Are we able to bulk upload manual transactions. I have cash sales and PayPal payments that are reported via self assessment?

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It would be amazing if this data feeds into FreeAgent/other-tools-via-Monzo-API as then it can be tagged+categorised instantly, making everyones lives eaiser as well as following this new MTD stuff

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At the moment we’ve only got the ability to add one manual transaction at a time. We have been thinking about bulk upload but we were thinking more about importing other bank statements though.

If the PayPal payments go into your business account then you’ll be able to set the tax category on those transactions.

How would you want that to work for cash sales? Would you want us to give you a template to fill in that you can upload? And, would you be recording your total cash takings for the day, or would you want to import each individual transactions.

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Hey Kenny, it’s completely your choice which tool you use for Making Tax Digital for Income tax but for most cases you wouldn’t need both Monzo Business and FreeAgent (or another accounting tool). Either of them can do your Making Tax Digital for Income Tax submissions for you.

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Ideally a pre-formatted template to upload the cash income and expenditure transactions maybe pre formatted in google sheets with the ability to link it like the auto spreadsheet connection available in Max entering transactions this way would be much more efficient than single entry via a mobile