HSBC UK, in collaboration with software company Sage, is set to introduce a digital tax reporting tool to help business owners adapt to Making Tax Digital for Income Tax (MTD) rules due to start in April.

The new tool, dubbed My Business Finances, is built on embedded technology from Sage and sits within HSBC UK’s business banking platform.

The service enables users to handle their accounts and file tax returns online from the same banking platform, removing the need to log into separate accounting software.

Additionally, it will enable customers to manage tasks such as bookkeeping and invoicing from inside their HSBC UK business account.

HSBC UK SME Business Banking head Tom Wood said: “Small businesses are often incredibly ambitious but generally short on time. As a trusted banking partner, we are always looking at where owners can make savings so they can focus on growing their business.

“Tax compliance can be both time-consuming and costly – HSBC My Business Finances will take care of a business’ invoicing, accounting and tax compliance all in one place. This is especially useful ahead of new tax reporting requirements in April.”

The collaboration between HSBC UK and Sage is intended to provide small companies and self-employed customers with day-to-day support as tax administration moves onto a fully digital footing.

Initially, the My Business Finances tool will be offered to sole traders and landlords, groups that will be directly affected by the forthcoming MTD changes.

Sage Fintech and Embedded Services senior vice-president Gordon Stuart said: “Small businesses and sole traders want to focus on doing what they do best, without the burden of complex admin.

“By embedding Sage’s trusted accounting and tax capabilities directly into HSBC UK’s business banking account, we are making managing finances effortless and accessible.”

In September last year, Sage unveiled its AI-driven MTD for Income Tax automation tool.