If you are still mixing personal and business finances, you are not alone. A lot of small business owners, sole traders and landlords have kept things simple that way for years. But with Making Tax Digital for Income Tax becoming mandatory in April 2026, now is a sensible time to get your bank accounts in order. Doing the hard work now means a much calmer, simpler tax year when the new quarterly reporting starts.
Making Tax Digital is coming: what that means for you
From 6 April 2026, many self-employed people and landlords will need to start keeping digital records and submit quarterly updates via recognised software, such as Xero. The new rules are being rolled out in phases depending on turnover. Getting used to a separate business bank account and cloud accounting before April will dramatically reduce last-minute stress and uncertainty.
Why do you need a dedicated business bank account?
A dedicated business bank account is more than tidy bookkeeping. It is the foundation for seamless digital record keeping. Modern business bank accounts connect directly to accounting software so transactions flow automatically into your system. That means less manual data entry, fewer reconciliations and a smoother quarterly reporting routine under MTD.
If your software and bank talk to each other through bank feeds, your accountant or bookkeeper can see up-to-date cashflow and be proactive about tax planning. Separating accounts reduces errors, saves time and gives you clearer financial visibility when HMRC asks for quarterly updates.
Did you know some business accounts include FreeAgent?
If you are wondering which bank to choose, there are options that bundle accounting software with the account. For example, Mettle by NatWest includes FreeAgent accounting software as long as you make at least one transaction a month from the Mettle account. NatWest business accounts also offer FreeAgent for eligible customers. That can save you money and means your bank feed and software will already be set up to work together.
Switching takes time, do it now so April is easy
We know setting up a new business bank account is a faff. You need to move direct debits, get used to a new debit card and update invoices. That is why doing it in November or December makes perfect sense. Give yourself a few months to move payments, test the bank feed into your chosen software and let standing orders and direct debits settle. By April you will barely notice the change.
Practical benefits of switching now
- You will have bank feeds connected to your accounting software well before the first quarterly update is due.
- You get time to sort out any weird or old payments that are still coming out of your personal account.
- If you choose a bank that includes FreeAgent, you can reduce software costs while keeping everything linked. But you should check if you like this software. Some software’s make more sense to different people, so you need to get on with your chosen option.
Quick checklist to make the switch without any stress
- Open the business account you want. Compare features such as bank feeds, charges, and what extras are included.
- Make a list of direct debits, standing orders and subscription payments on your personal account and move those that are business-related. Notify suppliers and update payment details.
- Update your invoices and contracts with the new bank details. Put a short notice on your website or client emails if payments will briefly change.
- Connect your bank to your accounting software and check that the feed imports transactions correctly. Reconcile the first month to catch any miscategorised items.
- Keep a short transition log so you can explain anything odd to your accountant or to HMRC if needed.
How Turas Accountants can help
We get it. Setting up a new business bank account feels like one more task on an already full plate. That is why we are here to help you plan the move so it is as painless as possible. We can:
- Recommend account and software combinations that suit your business.
- Help you connect bank feeds to your accounting software and reconcile initial transactions.
- Run through a simple checklist for moving direct debits and supplier payments.
- Work with you to make sure your bookkeeping is MTD-ready before 6 April 2026.
Get in touch with us today to start your Making Tax Digital transition.