What is the SMART initiative?

tomato pay, together with untied are delighted to collaborate on SMART - SMEs Manage Accounts Receivables and Tax.

SMART helps sole traders and micro-businesses manage the most important areas of their working capital - revenue, costs and cash.

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SMART initiative


In 2019, UK SMEs were owed £25,000 on average and faced payment delays of over 25 days. The late payments issue causes 50,000 small businesses to close down each year.

SMART empowers sole traders to easily invoice customers, and track and incentivise payment through discounts and penalties using best-in-class behavioural science techniques. Payments are embedded in the invoice, minimising the friction in the payment process and putting dynamic control of payment instructions in the hands of the business.


KPMG research indicates tax is the second largest cost for an SME.

Sole traders bear the burden of interpreting and meeting HMRC’s tax requirements, resulting in 67% of sole traders hiring an external accountant to manage parts of their taxes, paying them up to 3% to 5% of their annual turnover.

SMART empowers SMEs to automatically prepare and file an HMRC compliant tax return.

The tax liability algorithm helps them manage their tax filings at a fraction of the cost of an accountant and is compliant with HMRC’s Making Tax Digital initiative.


SMEs suffer from limited visibility into their future cash flow. Insufficient tax planning contributes to a shortage in working capital particularly towards the end of the financial year when tax payments are due.

SMART aggregates bank transaction data, invoice data and tax data into one place, provides an intuitive cashflow forecasting tool that surfaces potential cash shortfalls, and proposes tangible mitigating actions in the form of financing and insurance solutions.

Who will SMART serve?

The initiative focuses on sole traders. Sole traders with no employees make up 4.4 million of the 5.9 million small businesses in the UK. These can range from street market vendors and restaurants to hairdressers, electricians and plumbers.

Sole traders represent a fast-growing segment of the population and are expected to constitute a third of the UK’s workforce by 2025. These businesses are key drivers to the UK economy, however, they are often overlooked by traditional financial services.

This needs to change.

What are the SMART components?

The following SMART components are available to partners. The SMART functionality is available through a standalone app, or integrated into an existing service.

This will be included in a bespoke app or via an API.

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Green Tick Making Tax Digital Available now
Green Tick Tax Submission Available now
Green Tick Account aggregation Available now
Green Tick Payment for major banks Available now
Green Tick Tax Optimisation Available now
Green Tick Invoicing Available now
Green Tick 99% coverage of all bank accounts Available now
Green Tick Forecasting Available now
Green Tick Tax Forecasting Available now
Green Tick Borrow against invoices Available now

How is SMART funded?

SMART is backed by the Banking Competition Remedies (BCR) Capability and Innovation fund, designed to improve the financial products and services made available to small businesses.

Public Commitment Update

Key Achievements to Date

* untied is live with Barclays and Virgin Money supporting sole traders for their self assessment filings.

* tomato pay secured a partnership with Spire Technologies in the middle east to further accelerate its growth and potential in the UK.

* tomato pay has seen an increase in organic growth, securing c.1k+ new SME customers, transacting over c.£298 per payment.

* untied has deployed SA800 partnership return filing capability over API for third parties to use to file to HMRC.

* untied has deployed a web-based and API-accessible Taxpayer Identification Number (TIN) checker, allowing digital platforms to verify the national insurance number, date of birth and name of those earning on them; this is also useful for financial institutions.

* untied APIs are now available over the NayaOne platform. NayaOne has been selected to provide the FCA digital sandbox and the platform will enable financial institutions to embed tax capability.

Commitment 3 – Develop and scale the SMART proposition Revenue management proposition to include:
* Tax impact integration by May 2021
* Collection, invoicing tools and cash management tools by June 2021
* Dynamic discounting by September 2021
* Aiming to initiate £70m of Open Banking (PIS) payments by December 2024

We are not on track with this commitment.The Tax impact integration module was launched in Q1 2022. Collection, invoicing tools and cash management tools were delivered successfully in June 2021. In Q4 2021, the dynamic discounting feature was launched successfully as per plan. Although the original 2023 target (£17.9m) was missed, the revised forecast of Open Banking (PIS) payments for 2023 (£3m) was exceeded by £1.04m. The reduced target is in line with the larger economic slowdown and delays in HMRC MTD, impacting the volume of commercial activity and our ability to achieve the original £70m of Open Banking payments by the end of 2024. The team is confident that the revised 2024 target (£17m) is achievable based on the acceleration of commercialisation being driven by new strategic partnerships.

Commitment 4 – Distribute a simple, scalable and affordable method for SMEs to anticipate, prepare and submit tax.
Develop and scale SMART Cost (tax) management proposition to include:
* Open-Banking driven personal income tax management and optimisation with a focus on sole traders and with support for other income sources. Integration with HMRC via self-assessment and Making Tax Digital. Built-in submission of personal income tax filings at launch by December 2020
* Third party tax calculator APIs allowing banks and others to integrate tax by December 2020
* Aiming to submit 25,000 tax returns by December 2024

We have met this commitment except for the number of tax returns filed which will be missed. SMART was launched in December 2020 including Open Banking-driven personal tax management for sole traders, the integration with HMRC and built-in submission of personal income tax filings. SMART tax APIs and front-end builds (covering tax calculations, registration for HMRC services, compliance and filing) have been successfully delivered and integrated by third parties to deliver personal tax and partnership return services. The needs of HMRC’s Making Tax Digital for Income Tax programme represented a significant part of the SMART tax proposition. However, HMRC challenges have resulted in their MTD rollout for smaller businesses being delayed to 2028 at the earliest, at least five years later than their timetable when the initial SMART commitments were made in 2020. Therefore the returns target will be missed. While our capability remains in place, there is now much smaller and deferred commercial opportunity and much higher risk for developers. This commitment will only be updated in the event of a material change that brings the Making Tax Digital rollout forward at scale for smaller businesses.

Commitment 6 – Commit to promoting diversity and jobs nationally.
* This initiative commits to creating 22 jobs across software development, product management, data science, partnerships and sales by December 2022
* Empower underrepresented groups with exceptional employment opportunities targeting 50% of these positions outside London, by December 2022
* At least 10 paid internships will also be available by December 2024 to support mentoring and training young talent to succeed in the tech world

We are on track to deliver this commitment. Across tomato pay and untied, we have already created 23 jobs with 50% located outside of London. Across the two businesses, 5 paid internships have already been created.

Commitment 7 – Co-investment.
Fractal and untied will boost the delivery of SMART (created using C&I funding) by adding £1 from our own finances to every £1 received from BCR by December 2024.

In Q4 2023, the total spend was £123,531 with £65,152 or 53% coming from co-investment, which totals £1,814,560 at the end of 2023. Organic product growth coupled with new product capabilities and strategic partnerships are driving sustainable investment initiatives.

Who is behind SMART?

tomato pay

About tomato pay:

tomato pay is a free, simple, QR-code based payments app used by businesses and sole traders who want to receive payments in a fairer, cheaper and more ethical way. Businesses and sole traders can benefit from a low-cost solution with no hidden fees, that saves them money compared to their current payment systems, gives them instant access to their money as cash settlement happens almost immediately, and access to all of their bank accounts in one place. Everyone can support their local communities thrive by paying their neighbourhood businesses in a cashless, hassle-free way.


About untied:

untied is the UK’s personal tax app. It’s built for people, not accountants and is designed especially to help sole traders to get on top of their taxes. untied is the only end to end app that enables users to link their bank accounts, makes tax sense of their transactions and files directly to HMRC. untied launched untied lite in April, the first tax product designed specifically for gig/platform workers. untied’s partners include Revolut, Deliveroo, Stuart and Deloitte. untied is regulated by the FCA, supervised by the Chartered Institute of Taxation and recognised by HMRC.