Monzo Business

Monzo Business now includes a free, HMRC-recognised Making Tax Digital for Income Tax filing tool, built directly into the app on every plan, including the free Lite tier.

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At a glance

Monzo Business added a free, HMRC-recognised MTD for Income Tax filing tool built directly into the app. It works by pulling transactions you’ve already categorised in Monzo Business and submitting quarterly summary updates straight to HMRC, so you don’t need separate accounting or bridging software just to stay compliant.

Free

£9/m

Pro tier, adds invoicing

MTD filing on Lite tier

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Is Monzo Business HMRC-recognised for MTD?

Yes. Monzo Business now has a free, HMRC-recognised MTD for Income Tax filing tool built into the app, available on every plan including the free Lite tier. It’s aimed at sole traders and landlords with straightforward affairs: transactions you’ve categorised in the Monzo app feed directly into your quarterly submissions, so you can file without adding a separate accounting or bridging tool.

How does Monzo Business handle MTD for Income Tax?

Digital record keeping: transactions are categorised inside the Monzo app as they happen, satisfying HMRC’s digital records requirement
Quarterly updates: Monzo pulls your categorised transaction totals and submits each quarterly update directly to HMRC from within the app
Deadline reminders: Monzo’s tax timeline and in-app reminders flag upcoming MTD deadlines so submissions don’t get missed
Tax pots: you can automatically set aside a percentage of incoming payments to cover your tax bill alongside your MTD filing

Key features

Free, HMRC-recognised MTD for Income Tax filing, included on every plan including the free Lite tier
In-app transaction categorisation that feeds straight into your quarterly submissions, with no separate bookkeeping step
Receipt attachment against transactions for your records
MTD deadline reminders and a running tax timeline inside the app
Tax pots to automatically set aside money for your tax bill

Pricing

The MTD filing tool itself is free on every plan - what you pay for is the wider banking features around it.

Lite - Free

The essentials, including free MTD filing:

Free, HMRC-recognised MTD for Income Tax filing
Full UK business current account
Transaction categorisation and receipt attachment

Pro - from £9/month

Adds invoicing and accounting integrations on top:

Everything in Lite, including MTD filing
Invoicing and Tax Pots automation
Bank feeds into Xero, FreeAgent, Sage and QuickBooks

Team - from £25/month

For sole traders with a small team:

Everything in Pro, including MTD filing
Staff expense cards
Multi-user team access

See our full Monzo Business review, on the Business Banking page, for the complete feature breakdown.

Pros and cons

Pros:

Free, HMRC-recognised MTD for Income Tax filing on every plan, including the free Lite tier
No separate accounting or bridging software needed for straightforward sole trader affairs
Filing pulls directly from transactions you’ve already categorised in the app, cutting duplicate data entry
Tax pots and deadline reminders help you stay ahead of both the filing and the bill

Cons:

Best suited to straightforward affairs - built around your Monzo Business transactions rather than multiple income sources or complex bookkeeping
If you want invoicing, deeper reporting or a feed into dedicated accounting software, you’ll need the paid Pro tier
Not a substitute for full accounting software if your business has needs beyond MTD filing
Relies on you keeping transactions categorised in the app as you go, so it’s only as accurate as your day-to-day categorisation

Who is Monzo Business best for MTD for Income Tax?

If you’re a sole trader with straightforward affairs and you already bank with Monzo Business, its free in-app MTD filing tool is a genuinely simple way to stay compliant without adding separate software. It’s HMRC-recognised, free on every plan including Lite, and works from transactions you’ve already categorised in the app. If your affairs are more complex, or you want invoicing and a feed into dedicated accounting software alongside your MTD filing, it’s worth comparing against a full accounting platform or upgrading to Monzo Business Pro.

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Frequently asked questions

Can I use Monzo Business to submit my MTD for Income Tax quarterly updates?

Yes. Monzo Business has a free, HMRC-recognised MTD for Income Tax filing tool built into the app, available on every plan including the free Lite tier.

Is Monzo Business’s MTD filing tool free?

Yes, it’s free on every Monzo Business plan, including the free Lite tier. You don’t need to upgrade to Pro to use it.

How does Monzo Business’s MTD tool work?

It pulls transactions you’ve already categorised in the Monzo app and submits quarterly summary updates directly to HMRC, without needing separate accounting or bridging software.

Do I still need separate accounting software if I use Monzo Business for MTD?

Not necessarily, if your affairs are straightforward. If you need invoicing, more detailed reporting, or a feed into dedicated accounting software like Xero or QuickBooks, those sit on the paid Pro tier.

When do I need to start using MTD-compliant software like Monzo Business?

Sole traders with qualifying income above £50,000 needed to comply from April 2026. Those with income between £30,000 and £50,000 must join from April 2027.

Compare MTD software for sole traders

Monzo Business is one option among several worth comparing. Browse the full MTD Software directory to compare it against Xero, QuickBooks, FreeAgent and other HMRC-recognised options.

Pricing and offers correct at time of publication. Always check the Monzo website for current pricing and feature details before signing up.