MAKING TAX DIGITAL CONTINUES TO EXPOSE “BROKEN FINANCE PROCESSES” SAYS CEO OF FINEXER
– MTD will force UK SMEs into real-time finance, exposing billions of costs in outdated manual financial processes –
The latest rollout of MTD for Income Tax will require self-employed individuals and landlords earning over £50,000 to submit quarterly updates for the first time. This means that thousands of UK businesses are now dealing with a new way of running finance, and despite Making Tax Digital (MTD) being known about for years, many businesses are still not ready for it.
On paper, it is a compliance change, but in practice, it forces a more fundamental shift away from legacy processes and operating on a periodic, end of financial year exercise.
The cost of maintaining legacy processes is already significantly high, with UK businesses continuing to absorb costs from payment processing, such as card fees, can range between 1% and 3% depending on provider and volume. For the average SME, this can be tens of thousands of pounds annually. These inefficiencies are typically absorbed over time, however, with quarterly reporting, they become more visible and more difficult to manage.
The co-founder and CEO of UK open banking infrastructure provider Finexer, Ravi Ranjan, explains the real issue, “Making Tax Digital is not a future problem for accounting SaaS. It is a current requirement that demands live, continuous financial data. The platforms that make this infrastructure transition now will not revisit it. Those who have delayed will be under more pressure against competitors who have already moved on.”
For SME finance teams, the pressure is on. The first quarterly reporting deadline will arrive in July, leaving little room for processes that rely on manual data entry, delayed reconciliation, or incomplete financial records.
The challenge is that most SME finance operations are still built for a model where data is often gathered retrospectively, transactions are reconciled in batches, and visibility into cash positions can lag by days or even weeks.
At the same time, many of the systems finance teams rely on today – card networks, manual bank transfers, third-party data tools and document-based verification – remain fragmented and were never designed for real-time financial operations.
They can introduce delays, additional costs, and operational complexity. As a result, accounting platforms, payroll systems and ERP providers are effectively operating with infrastructure that adds friction at every step.
Open Banking offers a way to help reduce reliance on fragmented systems, and the UK remains one of the most advanced Open Banking markets globally, with more than 16 million active connections and millions of payments processed each month. Yet until recently, accessing open banking in a way that works for scaling platforms has been a significant barrier.
The practical difficulty of building reliable financial insights on the existing finance infrastructure is creating a gap that is becoming increasingly visible as reporting requirements tighten and expectations shift towards real-time data.
“Finance teams don’t have the luxury of fixing things at year-end anymore. If your data isn’t accurate in real time, the pressure shows up immediately, whether that’s in reporting deadlines, reconciliation, or cash flow visibility,” explains Ranjan.
The demand is particularly strong, with SMEs increasingly expecting finance platforms to provide faster payments, real-time visibility and simpler financial workflows. For businesses able to integrate financial data and payments directly, the impact is operational as much as regulatory – faster settlement, fewer errors, and clearer visibility over cash flow.
“The conversation around MTD is still focused on deadlines, but the real change is structural. Finance teams are moving to an operating model, where data needs to be available, accurate and usable all the time. The businesses that adapt to that will be in a much stronger position – not just to stay compliant, but to make better financial decisions,” concludes Ranjan.
Finexer, an FCA-authorised Open Banking infrastructure platform built for scaling B2B platforms, which provides Open Banking infrastructure covering payments, financial data, and verification through a single API, has seen increasing demand from scaling platforms looking to simplify their financial stack ahead of the April 2026 deadline. The company was recently ranked #32 in the Sifted 100 fastest-growing startups in the UK and Ireland.
