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Pennine Ventures

Coconut owners acquire cloud payroll tool MyPAYE

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The company behind GoSimpleTax and Coconut has added payroll software to its cloud platform via the acquisition of MyPAYE, as it looks to build a compliance suite of products for accountants.

5th Mar 2024
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Specialist software investor Pennine Ventures has added another layer to its compliance suite for accountants by adding cloud payroll product MyPAYE to its existing accounting software and tax filing options.

Founded in 2009 by Tim Sheppard, MyPAYE is currently used for more than 100,000 payslips a month. It works with small and medium businesses to provide payroll services, as well as supporting accountants and payroll bureaus through its white-label partner programme.

MyPAYE’s features include integrations with HMRC, bookkeeping packages such as QuickBooks Online and Xero, and major pension providers. It also offers timesheet and expenses functionality, and the ability to email encrypted payslips, summaries and statutory reports to clients.

In April 2023, Pennine acquired accounting app Coconut and combined it with its existing tax tool GoSimpleTax to create an end-to-end bookkeeping and filing solution.

Expand accounting market reach

Speaking exclusively to AccountingWEB before the announcement of the deal, Pennine Ventures director James Cryne said that following the GoSimpleTax-Coconut deal in April 2023, the company had received an increasing number of enquiries for a simple payroll product.

Through an existing business relationship, Pennine approached Sheppard, who was looking for a buyer for MyPAYE as he approached retirement, and a deal was struck. Sheppard will initially join the team to support the transition.

Initially, Cryne said the team would concentrate on building a full integration between Coconut and MyPAYE, before turning its attention to expanding its reach in the accounting market.

“We’re actively looking to grow the accounting side of our business with Coconut, GoSimpleTax and now MyPAYE,” said Cryne. “We’re looking to give accountants more options by offering feature-rich software with plenty of integrations.”

The Pennine Ventures team has previous payroll pedigree, as they founded Keytime, one of the biggest independent practice software providers in the UK, which offered a payroll module. Keytime was sold to IRIS Software Group in 2015.

Next stop MTD

After integrating MyPAYE, Cryne told AccountingWEB that the next task for their developers would be to add GoSimpleTax’s Making Tax Digital (MTD) VAT filing capabilities into Coconut, offering an end-to-end process for VAT-registered businesses.

Then the next big push will be into the realms of MTD for income tax self assessment (ITSA).

“We’ll be launching MTD products to cover the majority of accountants looking to service their sole trader and landlord clients,” said Cryne. “After that, we’ll look at corporation tax and accounts production software.”

Avoiding brand confusion

In the longer term, Pennine has to tackle the issue encountered by previous software consolidators such as Sage, IRIS, and most recently Bright – that of bringing several well-known brands together under one roof and offering them as a coherent package.

“We’ve now got three different brands all targeting the accounting market,” said Cryne. “We don’t want to push a confusing message. We want one brand to promote to the accounting market.”

Cryne emphasised that no decision has been made yet about which, if any, of the brands will be adopted in the future, and that any change would not happen overnight and would be clearly communicated to all customers.

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