Since Coconut was launched by our founders Sam and Adam back in 2018, we’ve been on a pretty big journey. Our first product combined an accounting product with a business current account—so it’s no surprise that that's how many people still think of us. But Coconut is not a bank, and we no longer offer current accounts; we’re a smart tax app that helps self-employed people unmuddle their finances.
So in this blog, we’ve summarised what you need to know about Coconut, including what we do (and what we don’t do)—and why. Because whilst our product has changed, our mission has always been the same: to make self-employment easier than being employed.
Is Coconut a bank?
No, Coconut is not a bank.
When Coconut started out in 2018, we offered a product that combined an accounting product with a business current account—and it was transformative for self-employed people in many ways. But over the last four years, we’ve learned a lot about the people that we’re trying to help. At the same time, the world around us changed massively—as has the industry we operate in.
So in 2021, we launched our smart tax app for self-employed people, which helps freelancers feel more organised than ever with their finances.
Seeing how useful it was to our customers, in January 2021, we made the decision to stop opening new business bank accounts for customers, so that we could double down on making our smart bookkeeping and tax app the best it possibly could be.
It was at this time that we also decided to focus on building our revolutionary new sole trader software for accountants, that makes it easier for accountants and bookkeepers to work with their sole trader clients—by enabling them to spend less time chasing paperwork, uncover more opportunities to grow revenue, and prepare their clients for MTD ITSA.
Why is Coconut no longer opening new bank accounts?
Our decision to stop opening new Coconut business bank accounts was not taken lightly. As we mentioned previously, our mission at Coconut has always been to make self-employment easier than being employed. And a lot of the challenges faced by the self-employed community stem from a) the blurred lines between business and personal finances, and b) the hassle of doing your own taxes.
And with Making Tax Digital on the horizon, those challenges will only become more pronounced—as self-employed people will need to do tax returns four times a year instead of one, using a digital product.
When Sam and Adam started Coconut, the only way we could effectively tackle those challenges was by creating our own current account. But since then, the capability of open banking has massively increased.
And now, not only are new business accounts much easier to open, there are also many excellent options to choose from—each of which will suit different self-employed people for different reasons. Because of that, we believe that we can make the most impact by focusing on refining Coconut's tax, bookkeeping, and invoicing tools, and—using open banking—make it possible for anybody to use them, whoever you choose to bank with.
Check out this blog for even more detail on our decision to stop opening new current accounts.
What does Coconut’s app do?
So, if Coconut is not a banking app…how does our smart tax app work?
Coconut’s accounting software for sole traders makes it easy for self-employed people to track income, categorise expenses, send invoices, and work out how much tax you owe in real-time—so that you can feel more organised than ever.
Once you’ve securely connected your bank and credit card accounts to Coconut (we support over 25), you’ll be able to see all of your finances in one place, and use our powerful bookkeeping tools to:
- Track your business performance
- Know how much money you should set aside for tax
- Categorise your self-employed expenses
- Scan receipts and save them securely in the cloud
- Create, send, and track digital invoices, and
- Work smarter with your accountant
Find out more about Coconut’s bookkeeping features for self-employed people, or try them out for yourself with our no-strings-attached 30-day free trial.