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Updated on 7 September 2026

Coconut review (2026): tax-focused accounting for UK sole traders

Prices and features last verified on 20 September 2026. Sources: Coconut website, HMRC MTD software list.

Coconut is HMRC-recognised for MTD Income Tax and starts at £6/month. Designed for mobile-first use by sole traders who need the simplest possible solution. Rated 3.9/5 for intuitive banking integration and basic expense tracking, though it lacks advanced accounting features.

Founded in 2016, Coconut is an app-first accounting tool built from the ground up for the way UK sole traders actually work. It does one thing — make running a small self-employed business as painless as possible — and does not pretend to scale to limited companies, payroll, or VAT-registered businesses. The built-in tax-pot calculator (set aside a slice of every invoice) is a favourite among its users.

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Who is Coconut best for?

Sole traders who want the simplest MTD-only tool, mobile-first workflow

Coconut is at its best for sole traders earning under the VAT threshold who do most of their bookkeeping on a phone — freelancers, side hustlers, and part-time self-employed. The built-in tax-pot calculator (“set aside X% of every invoice”) is one of its most loved features.

Pricing

From £6/month — £15/month. The basic Sole Trader plan starts around £6/month and covers MTD Income Tax; the higher tier adds more advanced tax estimation and accountant access. Verify the current price before signing up.

MTD Income Tax status

HMRC-recognised for MTD ITSA. Confirm on the official gov.uk MTD software list before signing up.

Pros & cons

Pros

  • UK-built, sole-trader-first design — opinionated and minimal, no bloat to configure
  • MTD Income Tax (ITSA) recognised on every paid plan, with built-in tax estimation so you know what to set aside
  • Mobile-led workflow — log income and expenses on the go from £6/month

Cons

  • No multi-currency — not suitable for traders earning in non-GBP
  • Limited third-party integrations — much smaller ecosystem than Xero
  • Doesn’t scale for VAT-registered businesses or limited companies

Verdict

Coconut is a deliberately small, focused product — and that is its strength. If you are a sole trader who wants the simplest possible MTD-only workflow with built-in tax estimation, Coconut is one of the better options in this comparison. If you anticipate scaling into VAT, hiring staff, or earning in non-GBP currency, FreeAgent, Xero, or QuickBooks remain stronger defaults.

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Frequently asked questions

Is Coconut HMRC-recognised for MTD Income Tax?

Yes. Coconut is fully HMRC-recognised for MTD ITSA on every paid plan and can submit quarterly updates and your End of Period Statement directly to HMRC.

Does Coconut offer a free trial?

Yes — Coconut offers a 14-day free trial with no card details needed. Paid plans start at £6/month.

Can I use Coconut on my phone?

Yes. Coconut is a mobile-first app — you can log income and expenses, snap receipts, and track your tax estimate from your phone.

What happens if I want to switch later?

You can export your data and switch to another HMRC-recognised provider at any time. Your submission history with HMRC stays intact.