At Lee Coombes Accountancy, we have been instrumental in helping leading fin-tech company, Coconut, in the development of a cutting-edge digital accounting application aimed at sole traders.
The app is designed to help sole traders streamline and simplify their accounts ahead of a new legal requirement to keep digital records and use software to submit online self-employment tax returns. It follows the mandate for VAT registered businesses to submit online through third-party software this year.
The collaboration with Coconut to develop the app has come about due to new plans which have been put forward by the UK Government titled: Making Tax Digital (MTD).
Making Tax Digital for Income Tax Self-Assessment (MTD ITSA) will apply to individuals from April 2024, legislating the digitalisation of recording tax data and submission. Businesses will have two years to prepare and test the service voluntarily prior to its introduction.
We were at the forefront of Coconut’s research, development and improvement, having been involved in the product’s early testing with accountants, and advising on how it could better benefit sole trader clients – a key component of the accountancy firm’s core customer base.
In light of the MTD ITSA changes, the application and an Accountant Platform offering has been created in order to make it a seamless transition for sole traders, allowing them to continue to focus on their business. Sole traders will benefit from the way the package includes the completion of all bookkeeping, transaction recording and tax efficient adjustments, as well as helping file Self-Assessment Tax Returns and quarterly reports as required by HMRC as part of MTD ITSA. Accountants benefit from much faster organising and preparing accounting information in preparation for the client’s tax.
The app has been developed with a focus on user experience, making it simple and easy-to-use while amalgamating expenses, invoicing and tax all in one. The product has been built now in preparation for the imminent legal requirement and in line with the grace period, aiming to help sole traders stay ahead of the curve.
The new app and offering promises to be a great time saver for sole traders, starting with the sign-up process, which has been purposefully streamlined to be quick and easy to use. The app’s built-in invoicing software also allows sole traders a simple platform to send invoices whilst on the go – either from their phone or desktop. As the Coconut app links directly to the user’s bank accounts or credit cards, it means there is no need to download statements for filing.
The software has also been developed to group expenses from similar suppliers, merchants and companies together, allowing for an easy amalgamation of information within the database. This, in turn, makes it easier for accountants to calculate tax and expenses, as well as sole traders trying to locate specific invoices.
Coconut is an industry-leading accounting software developer. The firm released its first product in 2018 to cater uniquely to the needs of sole traders. The company’s recent collaboration with us has allowed it to refine the application in time to help sole traders become compliant with the UK Government’s new MTD ITSA regulations.
Lee Coombes, Managing Director at Lee Coombes Accountancy, said:
“We are extremely excited to be involved with the new Coconut app. The aim was to increase the simplicity of accounting for sole traders, who can then focus on growing their business. We have developed the app in preparation for the upcoming changes in 2024 that will affect sole traders, so those individuals can get ahead by signing up for the package now.”
Sam O’Connor, Coconut CEO, said:
“Identifying a gap in the software market for sole traders and landlords, we set to work building something that’s simple for the client but drives real efficiencies and time savings for the accountant or bookkeeper. We build our features based on the needs of our partners and their clients and Lee has been committed from the start to supporting this process. Now we’re delighted to be helping his practice grow through this shift to digital.”