HSBC is launching a new tool designed to support sole traders and landlords as the government’s Making Tax Digital for Income Tax rules approach.

The new changes will require sole traders and landlords to use approved digital systems to submit quarterly income and expenses updates from April this year.

The bank’s new tool, developed with embedded technology from Sage, allows eligible customers to manage accounting and invoicing and submit tax returns digitally from their HSBC UK business banking account without needing to switch between apps or platforms.

The new My Business Finances tool will first be available to sole traders and landlords ahead of the changes.

Earlier this month, Monzo announced the launch of its free, HMRC-recognised tax tool using the same technology.

The move comes as Sage research shows that, despite the rules coming into force in just over two month's time, seven in ten sole traders are not yet prepared for the changes.

According to the software giant's data, a third are still tracking income and expenses manually, while a further two-thirds are relying on spreadsheets to complete their Self-Assessment returns.

HSBC said the new tax tool aims to offer practical support to help customers stay compliant, save time, and remain in control of their finances as the tax system becomes fully digital.

"Small businesses are often incredibly ambitious but generally short on time," said Tom Wood, head of SME business banking, HSBC. "As a leading and trusted SME banking partner, we're always looking at where owners can be more efficient 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 launch marks the latest in several recent initiatives aimed at the small business market for the bank.

In July last year, HSBC introduced a no monthly account fee on its Small Business Banking Account to accompany free UK digital banking and free access to Business Specialists.

The bank also runs the HSBC Small Business Growth Programme – a free, open-to-all platform offering training, events and expert insights.

HSBC currently serves over 15 million active customers across the UK, supported by 23,800 colleagues.

Around the world, it has offices in 57 countries and territories, with total assets of $3.2 billion.

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