HMRC-recognised
Built for sole traders, landlords & CIS
Works with your bank
14-day free trial
Your bank is built to manage your money. Coconut is built to manage your tax.
Free MTD features from your business bank can be a good fit if your finances are simple. But your tax software is something you’ll use to keep digital records, manage your income and expenses, understand your tax position and send updates to HMRC.
So it’s worth choosing it for what it can actually do - not simply because it comes free with your bank account.
Coconut is Making Tax Digital software built specifically for self-employed people. You can connect multiple accounts and cards, manage different income streams, keep your records independent of where you bank and get support from people who understand UK tax.
Making Tax Digital may be relatively new - but the tax expertise behind Coconut isn’t.
For more than 20 years, we’ve specialised in UK tax and helped self-employed people manage their Income Tax Self Assessment obligations. Today, that experience shapes the way Coconut supports people as the UK tax system moves towards more regular digital record keeping and reporting.
Our experience includes:
That background matters because MTD for Income Tax isn’t just a software requirement. It sits within your wider tax affairs - from keeping accurate digital records and tracking your income and expenses to understanding your tax position and completing your tax return.
Coconut has been built with that bigger picture in mind.
Our software brings day-to-day bookkeeping together with tax calculations, in-year estimates and MTD-compatible reporting, helping you keep the information you need organised throughout the tax year.
That’s the difference between adding tax features to another product and building software around tax from the start.
The biggest benefits of using a dedicated MTD app come down to one thing: it’s built around your tax, not your bank account.
You should be able to choose your bank because it’s right for your money - without letting that decision dictate how you manage your tax.
Coconut works separately from your business bank. If you change banks later, you don’t need to rebuild your whole bookkeeping and MTD setup somewhere else.
Your tax records stay with Coconut.
Business finances don’t always fit neatly into one current account.
You may have:
Coconut lets you connect multiple accounts and cards, giving you a broader view of the income and expenses that matter for your tax.
You might be a sole trader and a landlord. You might have more than one self-employed business. Or your income may simply come from several different places.
Coconut lets you manage multiple income streams in one account, while keeping the relevant digital records organised.
That means less switching between apps, accounts and spreadsheets to work out what belongs where.
Making Tax Digital for Income Tax isn’t just about sending quarterly updates.
Good digital record keeping can also give you a clearer picture of your income, expenses and tax position throughout the year.
Coconut provides in-year tax estimates, helping you see what you may owe before your final tax bill arrives.
If you have a question about MTD, Self Assessment or bookkeeping, you want an answer from someone who understands tax.
Coconut gives you access to dedicated bookkeeping and MTD support, including team members with previous HMRC experience.
Free is attractive - and for some self-employed people, MTD functionality bundled with a bank account may be perfectly adequate.
If you use one business account, have straightforward income and expenses and mainly want a basic way to meet your MTD requirements, you may decide that’s all you need.
But “free” shouldn’t be the only thing you compare.
Specialist MTD software can add more value if:
The right software is the one that fits the way your business actually works.
Bank MTD tools and Coconut start from different places.
Designed to support banking
Designed to support your business
Helps banks attract and retain customers
Built solely to make bookkeeping and tax simpler
Often limited to transactions from one bank
Connect multiple bank accounts and credit cards
Banking comes first
Bookkeeping and tax come first
General banking support
Dedicated bookkeeping and MTD specialists
Bookkeeping is an added feature
Bookkeeping is our entire business
There’s nothing wrong with choosing MTD functionality from your bank if it does everything you need.
But if your business is more complicated than one account - or you simply want your tax handled by specialist software - Coconut gives you another option.
Keep the bank that works for you. Choose Coconut for your tax.
Getting started is straightforward.
Securely connect the bank accounts and cards you use. Coconut imports your transactions automatically, helping you reduce manual record keeping.
Categorise income and expenses, store receipts and keep your records up to date throughout the tax year.
If you have different self-employment or property income streams, Coconut can keep those records organised within the same account.
Read more about keeping digital records for Making Tax Digital.
When they’re due, use Coconut to send your quarterly updates to HMRC.
Your digital records stay connected to the wider MTD for Income Tax process, including your year-end tax return, so you don’t have to piece everything back together later.
If all of your relevant business activity sits within one bank account and you only need straightforward digital record keeping and MTD functionality, a free banking tool may suit you perfectly well.
Dedicated MTD software becomes more useful when you have multiple accounts, cards or income streams, want your records to remain independent from your bank, or value specialist tax support.
Monzo, Starling and Tide are banking providers that offer bookkeeping, accounting or MTD-related functionality to business customers.
Coconut is different because banking isn’t the core product. It’s dedicated bookkeeping and tax software that can work alongside the bank or accounts you choose.
So if you’re comparing Coconut vs Monzo MTD, Starling MTD or Tide MTD, look beyond whether the software is free. Consider how it handles your accounts and income streams, whether you want to keep your tax setup independent from one bank, and what kind of tax support you want.
The same principle applies when comparing Coconut with MTD tools available through other business banks, including Lloyds and HSBC.
There isn’t one best MTD app for every sole trader.
The right software should fit the way you earn and manage your money. Look for MTD-compatible software that makes digital record keeping straightforward, supports your income sources, handles quarterly updates and gives you the level of tax support you need.
Coconut is designed specifically for sole traders, landlords and other self-employed people. Read more about Making Tax Digital for sole traders.
HMRC does not recommend one particular accounting software provider.
Instead, it provides a list of software that works with Making Tax Digital for Income Tax. Coconut is HMRC-recognised for MTD for Income Tax.
You need compatible software to create and maintain the required digital records and send information to HMRC, but you don’t necessarily need a full traditional accounting package.
HMRC allows businesses to use one software product or digitally linked products. If you prefer keeping records in spreadsheets, for example, you can use MTD bridging software to connect those records to HMRC.
No. Your MTD software does not have to come from your bank or be tied to one particular bank account.
HMRC requires you to keep the necessary digital records using compatible software. Connecting your bank can make that process easier by importing transactions automatically, but it doesn’t mean your bank has to provide your MTD software.
Coconut lets you connect your accounts while keeping your bookkeeping and tax setup independent from your banking provider.
MTD for Income Tax started on 6 April 2026 for sole traders and landlords whose qualifying self-employment and property income was more than £50,000.
It will extend to qualifying income over £30,000 from April 2027 and over £20,000 from April 2028.
You can check the latest Making Tax Digital for Income Tax guidance on GOV.UK.
Free banking tools have their place. But if you want MTD software built specifically around self-employment, bookkeeping and UK tax, Coconut gives you more freedom over how you manage your records.
Connect multiple bank accounts and cards. Keep different income streams organised. See your tax position as you go. Get help from people who understand MTD.
And if you change banks? Coconut stays with you.
Tax is what we do.
