UK-based digital bank Starling has made its proprietary Making Tax Digital (MTD) for Income Tax tool available free of charge to business customers. This move precedes new HMRC requirements set to take effect on April 6, 2026.
This initiative aims to provide sole traders and landlords with sufficient time to familiarize themselves with the new compliance procedures before the deadline. Starting from April 2026, sole traders and landlords with an annual turnover exceeding GBP 50,000 from self-employment or property income will be required to use HMRC-recognized software for maintaining digital records and submitting quarterly updates.
Streamlined Tax Reporting
The MTD tool is fully integrated within Starling’s business bank accounts. Customers can submit tax updates directly to HMRC through this tool without needing third-party software assistance. The solution has received HMRC recognition, catering first to the mandated users and also being accessible to those with lower turnovers who might choose to adopt MTD reporting ahead of their own deadline.
Redesigned Business Offerings
The MTD tool is part of a broader refresh of Starling’s business services. The bank has replaced its existing ‘Business Toolkit’ with a restructured ‘Accounting’ proposition, which includes two tiers: ‘Accounting Essentials’, offered at no cost and enabling real-time transaction categorization, live financial overviews, and direct MTD tax updates to HMRC; and ‘Accounting Plus’, available for GBP 7 per month, offering additional VAT record-keeping and direct VAT return submission capabilities.
Because these tools are natively integrated within the Starling app, users do not need to export data or maintain a separate accounting login. Transactions can be categorized as they occur, with tax submissions generated from the same interface used for everyday banking.
Roadmap and Industry Impact
MTD for Income Tax marks one of the most significant changes in the UK’s self-assessment tax framework in recent times. HMRC designed this program to digitize income tax record-keeping and shift reporting from an annual model to a quarterly one, aiming to reduce errors and enhance accuracy. As per the mandate for those with turnover above GBP 50,000 set for April 2026, similar requirements are expected to extend to individuals earning above GBP 30,000 in April 2027, potentially impacting all remaining sole traders and landlords at a later date.
Starling’s decision to offer this compliance tool free of charge places it differently from many standalone accounting software providers that charge recurring subscription fees. By embedding MTD functionality directly within the bank account, Starling is streamlining the compliance and banking workflows into a single product, which could influence how other banks and fintech companies approach similar regulatory transitions.
