According to Coconut, the app-based business current account will prepare customers for HMRC’s ‘Making Tax Digital’ which starts rolling out from April 2019. The app features automated tax management and expense tools, giving customers visibility into how much tax they owe with a real-time estimate, while also categorizing their expenses for tax and allowing them to stay on top of client payments with instant notifications.
The Coconut Start account, which ultimately aims to eliminate tax returns, is also free and able to be open in minutes on a mobile instead of waiting for weeks which is the current norm. The app will offer optional extra services, such as VAT management. The company revealed:
“Recent data from Coconut’s Self-Employment Survey highlights how money becomes complicated business when you work for yourself. Unexpected tax bills, unpaid invoices and financial admin are holding people back from finding financial security, with a quarter of respondents admitting that budgeting for taxes is one of the top five headaches when working for yourself. Keeping track of expenses (24%) and completing tax returns (22%) were also high on the list of challenges that self-employed people face, with almost a quarter storing their receipts in a box waiting to be sorted at the end of the year.”
Sam O’Connor, Co-Founder and CEO of Coconut, stated:
“The growth of self-employment in the UK is one of the biggest structural changes in our workforce of our time, but self-employed people are still one of the most underserved groups of businesses when it comes to banking products and services that meet their specific needs.”
O’Connor then added:
“Staying on top of tax and expenses, getting paid on-time or managing an unpredictable flow of income is a big worry and time-suck for customers. And this is only going to become a bigger burden with Making Tax Digital requiring digital tax submissions quarterly instead of annually. We created Coconut to sort out these challenges for freelancers and we ultimately aim to eliminate the need for tax returns, removing a huge amount of stress for business owners.”