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.
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.
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?
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.
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.
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
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.
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.
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
This is fantastic news. Are there any plans to add this as a feature for personal accounts? There are many people who have to file self assessments from property, trading, company share schemes etc.
This would be something that many customers would probably be willing to upgrade their accounts for. For example, an individual with two rental properties could have all transactions routed through Monzo and the MTD function will save a lot of time at the end of each year. They might even save money if they use an accountant to file.
Is it possible for invoices to be ported straight into Monzo? For example, in Switzerland a business can send an invoice directly to an individual’s bank and most bills come with a QR code for individuals to upload into their banking app. Although this is routine in Switzerland, it would be very innovative for the UK as a feature in its own right. There is also potential for multiple line invoices to be parsed and put into different categories for tax purposes.
We’ve been focused on businesses at the moment but I can share the feedback with wanting this for personal accounts too.
For property, I know landlords don’t always consider themselves a business but if you have a Monzo Business Account for your property business then you can use it to do UK property submissions for Making Tax Digital for Income Tax.
It might be worth looking at again. The majority of the UK rental market is dominated by private individual landlords. By ownership, >90% are individuals vs. registered companies. By rental agreements (property volume) 81% were held with private individual landlords. Source: English Private Landlord Survey 2024: main report - GOV.UK.
Why is this significant? These landlords file taxes under personal tax returns as additional income with allowable deductions. Depending on how many properties they have and total rental income they will be hit by MTD. They will either need to give their money to an accountant, or a software provider. Or they could sign up to Monzo Plus, redirect their rental incomes (and remortgages?) to Monzo, and have a neat bundled-in HMRC submission each year or quarter.
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.
