Making Tax Digital: Barclays Partners with Sage for UK SMBs

The landscape of small business finance is undergoing a digital shift as Barclays and Sage announce a new strategic partnership. The collaboration aims to help businesses save time on administration, gain clearer oversight of their finances and keep pace with evolving UK tax requirements.

By merging Barclays’ business banking expertise with Sage’s accounting technology, the pair intend to tackle the manual processes that often hinder growth.

Tackling the 13-month year

For many entrepreneurs, the burden of financial administration remains a significant barrier to productivity. Research from Sage indicates that the average small business loses 24 working days a year to financial tasks. This administrative drag is the equivalent of working 13 months in a 12-month year.

The partnership seeks to reclaim this lost time through modern digital management tools. By creating a more seamless link between bank accounts and accounting software, the initiative focuses on automating the everyday data entry and reconciliation that underpins running a business.

Navigating regulatory shifts

Beyond daily efficiency, the partnership is positioned as a critical support system for the expansion of Making Tax Digital (MTD) for Income Tax. As regulatory requirements evolve, small businesses are under increasing pressure to maintain up-to-date digital records.

The integration will provide clearer financial oversight, ensuring that businesses can navigate these legislative changes without being overwhelmed by new compliance hurdles.

Abdul Qureshi, Head of Business Banking at Barclays, says: “Small business owners consistently tell us that they are spending too much time on administration and not enough time growing their businesses. By partnering with Sage, we are bringing trusted banking and accounting tools closer together to simplify day-to-day financial management and unlock capacity. 

“As Making Tax Digital expands, this partnership will help our customers stay on top of their obligations whilst focussing on what matters most – running and growing their business.”

Simplifying the fintech stack

For Sage, the move represents a deeper dive into embedded finance and the integration of essential services directly into the platforms where business owners spend their time.

Gordon Stuart, SVP of Fintech and Embedded Services at Sage, notes: “Small businesses want technology that makes running their business simpler, not more complicated. Working with Barclays, we are taking steps to bringing banking and accounting closer together to reduce that burden and give owners a clearer picture of their finances. This will help small businesses get hold of the tools they actually need.”

The focus is on providing a clearer financial picture by reducing the friction between two historically separate functions of business management. By bridging the gap between the bank statement and the ledger, Barclays and Sage aim to provide a unified experience that meets the specific demands of the UK’s SME sector.

Sage recently also announced a partnership with SumUp as it helps UK merchants to prepare for the MTD deadline. 

Recent research from Sage suggests a staggering 70% of sole traders are currently unprepared for the transition to MTD for Income Tax, with a significant portion of the market still reliant on paper records or basic spreadsheets for Self Assessment.

The integration helps to close the preparedness gap as Sage’s AI-powered accounting technology is embedded into SumUp’s platform interface.