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Coconut adds tax filing with GoSimpleTax integration

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Accounting app Coconut has added a self assessment tax return filing option for users via an integration with software stablemate GoSimpleTax.

8th Feb 2024
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The API-powered integration is a one-way connection that takes figures from Coconut and creates a self assessment tax return in GoSimpleTax – and is included in the Coconut package as a free filing option.

Tax tool GoSimpleTax acquired accounting app Coconut in April 2023 with the stated aim of combining Coconut’s bookkeeping software with GoSimpleTax’s filing capabilities to create a challenger in the UK cloud accounting market.

Coconut has largely focused on providing an app and browser-based bookkeeping tool for accountants with a sole trader or “shoebox” client base, using bank feeds, receipt and invoice capture tools and manual entry to add accounting data. Accounting firms are able to access client data via a partner account, and firms using Coconut on behalf of clients will have the ability to toggle the tax filing integration on or off, with the default set to off.

“The development sits on the back of Coconut, and extends its ease of use into the self assessment tax return, including SA103 and SA105 report forms,” Mike Parkes, technical director at GoSimpleTax told AccountingWEB.

The GoSimpleTax integration is optional for Coconut users, and accountants who use third-party tax filing software can export the data by an SNF file copy-paste.

In addition to the integration, Coconut has also added receipt capture functionality to the Android version of its mobile app, improved the Open Banking connections to deal with duplicate transactions and added the option to raise an invoice without having to email it, all focused around improving the user experience.

Future developments

Parkes added that future developments to the tool will include more granular controls for accountants, with access levels depending on the needs of each firm.

The team also plans to expand the tool’s tax capabilities to include Making Tax Digital (MTD) for VAT filings.

“We’ve already done MTD VAT filing with GoSimpleTax, so making Coconut’s functionality available for VAT-registered small businesses is a natural extension,” said James Cryne, co-founder and director of GoSimpleTax.

“We’re now planning how to deliver the ultimate MTD ITSA [income tax self assessment] proposition in 2026,” added Cryne. “Coconut has developed quarterly submissions and is currently listed as 'in development' on HMRC's website. GoSimpleTax has self assessment pedigree, so we’ll build a comprehensive final declaration offering to go with that.”

MTD ITSA delay led to sale

Coconut was initially founded in 2018 as a combined current account and tax tool for freelance subscribers. In 2021 it switched tracks to provide an accounting product for sole traders and landlords. Valued at £18m in 2021 as part of a campaign on the crowdfunding platform Crowdcube, Coconut raised a total of £6m from investors. 

However, the new iteration of the product focused heavily on preparing sole traders and landlords for MTD ITSA assessment mandation deadline in 2024 – with future growth plans for the tool predicated on the legislation.

The government’s decision to delay the mandation of MTD ITSA for a further two years and raise the minimum income reporting level to £50,000 (removing more than a million taxpayers) hit smaller accounting software vendors hard and ultimately led Coconut co-founders Adam Goodall and Sam O’Connor to sell the company to GoSimpleTax last year.

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