How to Link Your Bank Account for MTD
One of the smartest things you can do when setting up for MTD is connect your business bank account to your software. Automatic bank feeds import your transactions without any manual data entry, saving you hours each month and dramatically reducing errors. Here is how it works.
What Are Bank Feeds?
Bank feeds are automatic connections between your bank account and your accounting software. Once connected, your transactions — every payment in and every payment out — are imported into your software automatically, usually within 24 hours.
You do not need to type in transaction details, check amounts against your bank statement, or worry about missing something. The bank feed captures everything.
How Bank Feeds Work Under the Hood
Most MTD software uses Open Banking to connect to your bank. Open Banking is a UK regulatory framework that allows authorised third-party services to securely access your bank account data with your permission.
When you set up a bank feed:
- Your MTD software directs you to your bank's secure login page
- You log in with your normal banking credentials
- You authorise the software to access your transaction data
- The connection is established
The connection is read-only. Your MTD software can see your transactions but cannot move money, make payments, or change anything in your account. It is purely an information feed.
The connection typically uses a provider like TrueLayer, which is authorised and regulated by the Financial Conduct Authority (FCA). Your bank credentials are never shared with or stored by your accounting software.
Which Banks Are Supported?
Virtually all major UK banks support Open Banking connections, including:
- Barclays
- HSBC
- Lloyds
- NatWest
- Santander
- Nationwide
- Monzo
- Starling
- Tide
- Metro Bank
- Co-operative Bank
- TSB
- Halifax
- Bank of Scotland
- Virgin Money
Accounted connects to over 40 UK banks and building societies through Open Banking.
Setting Up Your Bank Feed: Step by Step
Step 1: Open Your MTD Software
Navigate to the bank connections or bank feeds section of your software.
Step 2: Select Your Bank
Choose your bank from the list of supported providers.
Step 3: Log In to Your Bank
You will be redirected to your bank's secure login page. Enter your banking credentials as you normally would. This login happens on your bank's website, not within the accounting software.
Step 4: Authorise Access
Your bank will ask you to confirm that you want to share your transaction data with the software provider. Review the permissions and authorise.
Step 5: Select Your Account
If you have multiple accounts with that bank (current account, savings, credit card), select the one you want to connect. For MTD, this should be your business current account.
Step 6: Confirm the Connection
Once authorised, your software will begin importing transactions. Depending on the bank, you may see transactions from the last 90 days imported immediately.
Re-Authorisation
Open Banking connections typically need to be re-authorised every 90 days. Your software will notify you when re-authorisation is needed. The process is the same as the initial setup — log in to your bank and confirm.
This re-authorisation requirement is a security feature, not a flaw. It ensures that the connection remains under your active control.
What to Do After Connecting
Once your bank feed is active:
Review imported transactions. Check that the transactions look correct and complete.
Categorise transactions. Your software (or its AI, like Penny in Accounted) will suggest categories for each transaction. Review and confirm these suggestions.
Set up rules. For recurring transactions (monthly subscriptions, regular suppliers), set up rules so they are automatically categorised correctly each time.
Exclude personal transactions. If you accidentally connected a personal account, or if your business account has occasional personal transactions, mark these as excluded.
What If You Do Not Want to Connect Your Bank?
Bank feeds are not technically required for MTD. You can keep digital records by entering transactions manually. However, this approach:
- Takes significantly more time
- Is more prone to errors and omissions
- Requires you to check your bank statement and enter every item
- Defeats the purpose of using software to simplify compliance
If you are concerned about security, remember that Open Banking is regulated by the FCA and uses the same security standards as your online banking. Millions of UK consumers and businesses use it daily.
Multiple Bank Accounts
If you have more than one business bank account (for example, a current account and a savings account, or accounts with different banks), you can connect them all. Your software will import transactions from each and keep them organised.
Some sole traders also connect a business credit card to capture those transactions automatically.
Accounted handles your bookkeeping, tax estimates, and MTD submissions automatically. Start your free trial — no credit card required.
Tax & Compliance Specialists
Our tax specialists have decades of combined experience in UK sole trader and small business taxation, MTD compliance, and HMRC submissions. All content is reviewed against current HMRC guidance before publication and updated quarterly to reflect legislative changes.
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