TapTax vs Coconut for Self-Employed Tax (2026)

The pitch from Coconut is seductive: ditch your business bank account, ditch your tax app and just use us. For some sole traders, that bundled simplicity is genuinely compelling. For others, it means paying for a financial product they did not ask for in order to access tax software they actually need. That is the central tension in this matchup, and your answer to it should decide the whole comparison before you read another word.

In brief: if you already have a business bank account you trust, or you simply want focused MTD compliance software without being nudged towards a new current account, TapTax is almost certainly the sharper choice and at a lower annual cost. If you are starting from scratch and the idea of a single app for banking, spending and tax genuinely appeals, Coconut has real merit. Read on for the detail.

What HMRC's own directory says about Coconut

HMRC publishes a feature grid for every product on its find-MTD-software service, using its own three-state scale of ready now, in development, or not included. We scraped all 122 listings on 5 August 2026. Coconut appears twice.

Coconut

£129.99/yr or £21.99/mo MTD filing; £159.99/yr Full(checked August 2026)

• Free version: no
• Android; Apple iOS: yes
• Sole trader income: yes
• UK property income: yes
• Foreign property income: no
• Keeps digital records: yes

0/16 tax-return items ready, 16 more in development.

HMRC MTD for Income Tax directory, scraped 5 August 2026. Feature flags are vendor-declared. Vendor site

The bookkeeping tier does not file. The 14-day trial cannot file either. A separate Self Assessment add-on at £129.99/yr does not include quarterly MTD, despite matching the price of the plan that does.

Coconut Free

£0, conditional(checked August 2026)

• Free version: yes
• Android; Apple iOS: yes
• Sole trader income: yes
• UK property income: yes
• Foreign property income: no
• Keeps digital records: yes

0/16 tax-return items ready, 16 more in development.

HMRC MTD for Income Tax directory, scraped 5 August 2026. Feature flags are vendor-declared. Vendor site

Coconut Free is a Zempler Bank acquisition deal offering two years free to new funded accounts, rather than an unconditional free tier. It is free with a bank account, not free with the software.

HMRC lists what each vendor declares. Feature flags, mobile-app support in particular, are vendor claims rather than verified facts, and listings change. Check with the vendor before you buy. Data: HMRC find-MTD-software service (tax.service.gov.uk), scraped 5 August 2026.

Three things stand out, and they matter more than anything in the marketing on either side.

Coconut is graded 0 of 16 on the tax-return items, with all 16 marked in development. It can keep digital records and file quarterly updates. On HMRC's current grading it is not able to complete any of the year-end items: interest, dividends, pension income, CIS, capital gains, student loan and the rest. It is not alone in that.

87of 122 (71%)cannot complete a single tax-return itemHMRC MTD for Income Tax directory, scraped 5 August 2026

Foreign property is graded not included on both Coconut listings, so an overseas rental is out.

The free listing is a bank deal. HMRC's directory carries a free version flag for Coconut Free, which is accurate as far as it goes, but the condition is a new funded Zempler Bank account. That is a real saving if you want that account and no saving at all if you do not.

You can compare every listed product on the same basis in the MTD software directory, and the full analysis is in our review of all 122 HMRC-listed MTD tools.

The single biggest difference: tax tool versus banking hybrid

Coconut is not, at its heart, a tax app. It is a regulated UK current account with tax-tracking layered on top. That distinction matters enormously for sole traders. When you sign up to Coconut for its tax features, you are also signing up to its banking infrastructure. Your expense categorisation, tax estimates and MTD submissions all sit inside an ecosystem that assumes Coconut is where your business money lives.

TapTax takes the opposite approach. It connects to your existing bank or banks via open banking, reads your transactions and lets you categorise, snap receipts and file quarterly updates to HMRC without asking you to move a single penny. The app does one thing: keep you MTD-compliant, simply and cheaply.

Pricing in detail: what you actually pay each year

The gap is much wider than an earlier version of this page suggested. As checked in August 2026, Coconut MTD filing is £129.99 a year or £21.99 a month, and the Full tier is £159.99 a year. TapTax Starter is £59.88 a year, so Coconut costs roughly £70 more annually for the filing tier, and that is before you consider that Coconut's full value assumes its current account rather than your existing one.

Two details in Coconut's pricing are worth reading slowly. Its bookkeeping tier does not file MTD at all, so the cheapest plan is not a route to compliance. And a separate Self Assessment add-on is also priced at £129.99 a year but does not include the quarterly MTD updates, despite matching the price of the plan that does. If you are choosing on price, check that the tier you are comparing is the one that actually files.

The TapTax sole trader tax calculator is available free of charge to any visitor, so you can get a reliable tax estimate before you even create an account.

MTD compliance: where TapTax was built differently

MTD for Income Tax became mandatory for sole traders earning over £50,000 from April 2026. If you want to understand what that means for your quarterly obligations in practice, the plain-English guide to MTD for sole traders covers the full timeline, penalties and what HMRC actually expects from each submission.

TapTax was designed from day one around those quarterly submissions. Every screen in the app, from transaction categorisation to the final one-tap filing confirmation, is oriented towards producing a compliant quarterly update. There is no invoicing module, no payroll section and no time tracker, because none of those things are required for MTD ITSA compliance, and adding them would clutter the path to filing.

Coconut's tax tracking is genuinely useful for monitoring expenses and estimating a tax bill as you go, and it will file your quarterly updates on the tier that files. Where HMRC's grading shows a gap is the year end: Coconut is at 0 of the 16 tax-return items ready, with all 16 in development. It is far from alone in that, and Coconut has committed to closing it for the 2026-27 return, but as things stand a return with interest, dividends, pension income or CIS in it is not one Coconut is graded able to finish.

Where Coconut genuinely wins

It would be unfair not to say this plainly: Coconut is excellent at what it is actually designed to do. If you are a freelancer or contractor who does not yet have a dedicated business bank account and you want a single regulated account that automatically sorts your spending into tax-relevant categories as you go, Coconut removes a layer of friction entirely. Your banking and your tax tracking live in one place, there is no open banking connection to set up, and you see a live running estimate of your tax liability inside the same app where you pay your suppliers.

For a sole trader who is just starting out and genuinely has no banking preference yet, that bundled experience has real value. The basic invoicing feature also covers a gap that TapTax deliberately leaves unfilled.

Ease of use and mobile experience

Both apps are genuinely mobile-first, and both are far easier to navigate than a desktop-heritage product like Sage or a sprawling platform like QuickBooks. The key difference is onboarding friction. With TapTax, you connect your existing current account via open banking in a few taps, and your transaction history starts appearing within minutes. With Coconut, the onboarding process is closer to opening a new bank account, with identity verification, which takes longer and commits you more deeply to the platform.

For quarterly planning, TapTax includes a dedicated quarterly planner tool that shows you exactly what each submission period covers and how your current income and expenses translate into an estimated liability, so there are no surprises when the deadline arrives.

Who should choose which

If you are a freelance designer earning £60,000 with a Monzo business account

You already have banking sorted. Switching to Coconut would mean either running two accounts or abandoning a setup that works. TapTax connects to Monzo via open banking, costs £59.88 a year at Starter tier, and handles your MTD quarterly filings without asking you to change anything else. The choice is straightforward.

If you are a newly self-employed consultant with no business account yet

Coconut is worth serious consideration. You need a business account anyway, and Coconut's bundled model means you set up banking and tax tracking in one go. The premium over TapTax Starter is modest at this stage, and the integrated experience is genuinely smoother when you are starting from zero.

If you are a courier or delivery driver turning over £52,000

You are inside the first wave of mandatory MTD. You need software that files reliably and simply. TapTax's free tier lets you test the full experience before committing a penny. Start there, confirm it connects to your bank correctly, then decide whether to move to Starter before your first quarterly deadline.

If you want one app that does banking, invoicing and tax

TapTax is honest about not being that app. It has no invoicing, by design. If invoicing is important to you alongside tax, Coconut covers it at a basic level. For more sophisticated invoicing, a dedicated tool like FreshBooks would suit you better, though that is a separate cost again.

The bottom line

Coconut and TapTax are solving different problems. Coconut is asking: what if a sole trader never had to think about whether their bank and their tax app are compatible? TapTax is asking: what if MTD quarterly filing was so simple and cheap that there was no reason to dread it?

For most UK sole traders who already have banking arrangements they are happy with, TapTax wins on cost, on MTD filing depth and on the freedom to stay with a bank that suits them. For those genuinely starting fresh who want the fewest possible apps to manage, Coconut's integrated model deserves a proper look.

People also ask

Does Coconut support MTD for Income Tax quarterly submissions?

Can I use TapTax if I bank with Coconut?

Is Coconut free for self-employed tax?

Do I need to switch banks to use TapTax?