HSBC UK taps Sage for in-app SME tax and accounting solution

HSBC UK has partnered with accounting software provider Sage to introduce an embedded finance tool designed to help small businesses and sole traders prepare for the UK Government’s upcoming Making Tax Digital for Income Tax (MTD) reforms, due to take effect in April.

The new solution, branded My Business Finances, integrates Sage’s accounting and tax technology directly into HSBC UK’s business banking platform. Eligible customers will be able to manage invoicing, accounting and tax submissions from within their business banking account, eliminating the need to switch between separate software applications.

The launch comes as small businesses face mounting pressure to transition to digital record-keeping and tax reporting. Under MTD reforms, sole traders and landlords above the income threshold will be required to maintain digital records and submit quarterly updates to HMRC using compatible software.

Research conducted by Sage suggests that preparedness remains uneven. Seven in ten sole traders are reportedly not ready for the changes, with a third still tracking income and expenses manually and two-thirds relying on spreadsheets for Self-Assessment returns. The findings highlight a significant readiness gap as the compliance deadline approaches.

HSBC UK said the embedded solution is intended to simplify compliance and reduce administrative burden for time-constrained business owners. By integrating accounting functionality directly into the banking interface, the bank aims to streamline financial management and support regulatory adherence.

The tool will initially be made available to sole traders and landlords, segments directly affected by the first phase of MTD for Income Tax.

The announcement forms part of HSBC UK’s broader small business support strategy. In July 2025, the bank removed monthly account fees for its Small Business Banking Account and expanded access to digital banking and business advisory services. It also operates the HSBC Small Business Growth Programme, offering training and resources to entrepreneurs.

As banks increasingly integrate third-party financial management tools into core platforms, the move underscores a wider trend toward embedded accounting and compliance services within business banking. With regulatory digitisation accelerating, such integrations are becoming a strategic lever for customer retention and deeper platform engagement in the SME segment.