An embedded accounting startup has raised £5m and struck a deal with HSBC to provide digital tax services to hundreds of thousands of its SME customers amid the UK’s shift to a fully digital tax system.

Ember, founded in 2018 by ex-Deloitte executive Dan Hogan and software engine Aaron Shaw, is looking to shake up the world of accounting and take on the big boys like Sage and QuickBooks.

While it will have some way to go, the startup has struck a deal with HSBC, where it will provide various digital tax services to hundreds of thousands of its SME customers, integrating tax and accounting tools into its banking platform.

The idea is that it will simplify financial management for SMEs in the UK.

HSBC’s SME customers will be able to integrate invoicing, categorise transactions and track cashflow through the embedded offering, which Ember hopes to sell to other banks.

Ember began life offering its services direct to customers but has now pivoted down the embedded finance route.

Ember got the gig with HSBC after Hogan presented at an Open Banking conference, on the future of accounting and tax, he said.

HSBC hopes the services will help its customers shift to digitise their taxes, amid the government’s Making Tax Digital initiative, an initiative to implement a full digital tax system across the UK.

Hogan said: “It will impact around 1.75m business owners in the UK. As of 2026, those business owners will have to file additional tax returns through the year, rather than just a single tax return at year-end. 

“So what we are doing here is trying to help HSBC and their customers prepare for Making Tax Digital.”

Coinciding with the HSBC deal, Ember says it has raised a fresh £5m, making its total funding to around £10m.

The round was led by N26 investor Valar Ventures, fintech investor Viola Fintech and European fintech investor Shapers.