How much does Making Tax Digital software cost?
Complying with HMRC’s new tax rules doesn’t have to cost time or money.
There are lots of HMRC-recognised options you can use for Making Tax Digital for Income Tax, including Monzo’s own.
Before we get into it, a reminder that we can’t give you tax or financial advice. You’ll need to speak to a professional adviser for that.
Is Monzo Business’ MTD software free?
Yes. Soon, you’ll be able to file income tax straight from Monzo to HMRC with a free business bank account.
Our tax filing tool, powered by Sage, will come as standard with all our business plans, including our free Lite plan. It’s all built in, so you avoid having to buy and get to grips with extra tools. That means you can scrap the spreadsheets too, unless you actually enjoy them – no judgement here.
We can help trim your tax routine right down: categorising transactions, attaching receipts and saving for tax as you go. There are also clear explainers, timelines and reminders in the app to help you find your new filing flow.
Then when it’s time for your quarterly updates, tap and it’s with HMRC.
What does your MTD software need to do?
If you’re on the lookout for the right software, you need to make sure that the tool you use will:
Create and store digital records of your business expenses
Send your quarterly updates to HMRC
Submit your tax return by 31 January the following year
Think of these as your MTD software must-dos.
With that covered, there are different types of software that can handle this for you in different ways. Some will create digital records, while others will connect to your existing records like spreadsheets.
There are lots of software options available that create digital records for you by linking to your business bank account and importing your transactions automatically.
Then there are the 'in-bank' options, which is how Monzo's MTD tool works. That's where your business bank is connected to HMRC, so you don’t need any software to import your records, because it’s done automatically.
Finally, there are the tools that connect to your existing records through what’s called ‘bridging software’. This might work best for you if you want to keep using your current software and adapt it for Making Tax Digital.
Monzo Business: Tax filing built into your bank account
With Monzo, you’ll soon be able to file income tax straight from your business account to HMRC. No extra software, no extra cost – it comes as standard with a Monzo Business Bank Account, whichever plan you go for.
Why keep your tax filing in your bank account?
With our tax filing tool, your transactions are automatically recorded in Monzo. Just categorise them as they come in, and you've done most of the work already. It saves you switching between apps and digging out bank statements.
Here’s what you get:
Receipt management. Snap a photo and attach it to the transaction, so when you need proof later, it's right there.
Tax Pot savings. Set aside money for tax as you go, based on a percentage of your income (this one is a Pro feature, which means you’ll need to be on a paid plan starting from £9 per month to access it).
Filing made simple. When it's time to send your update to HMRC, you're a few taps away. Just review and submit.
Powered by Sage. Our tax tool uses Sage's accounting engine, wrapped in Monzo's simple interface.
Reminders of upcoming deadlines. They’ll help keep you on track with what you need to do and when.
Other free MTD software options
There are plenty to choose from, so here’s a rundown of some of the free MTD software options out there:
Monzo Business files tax straight to HMRC as standard
Sage Accounting Individual Free is ideal for non-VAT registered sole traders wanting to simplify manual record keeping and taxes.
Zoho Books includes a free tier covering invoicing, expense tracking, and direct quarterly submissions
QuickFile offers free MTD for VAT filing with full HMRC recognition
Clear Books provides free MTD services for self-employed sole traders and landlords
My Tax Digital allows free VAT return preparation and record-keeping.
To find a full list of free MTD software that’s recognised by HMRC, search using their finder tool.
With Monzo’s free MTD software available as part of a Monzo Business Banking account, you can file tax straight from Monzo to HMRC, ready for the new rules coming in April 2026. Apply for a free business bank account to get on the waitlist.
Only sole traders or limited company directors in the UK can apply. Ts&Cs apply.