Both apps promise to make self-employed tax painless, but one bundles a bank account you may not need, and one charges you nothing until you actually file.
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.
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.
| Feature | TapTax Free | TapTax Starter | TapTax Pro | Coconut |
|---|---|---|---|---|
| Monthly cost | £0 | £4.99 | £9.99 | ~£8-£11 |
| Annual cost (approx.) | £0 | £59.88 | £119.88 | £96-£132 |
| Built for | UK sole traders, MTD ITSA | UK sole traders, MTD ITSA | UK sole traders, MTD ITSA | Self-employed banking + tax |
| Requires own bank account | No | No | No | Yes (Coconut account) |
| MTD ITSA quarterly filing | Yes | Yes | Yes | Lighter coverage |
| AI expense categorisation | Yes | Yes | Yes | Yes |
| Bank feed (your existing bank) | Yes | Yes | Yes | Coconut account only |
| Receipt scanning | Yes | Yes | Yes | Yes |
| Mobile-first | Yes | Yes | Yes | Yes |
| Invoicing | No | No | No | Basic |
| Free tier | Yes | N/A | N/A | No |
At Coconut's lower price point of around £8/mo, you are paying £96 a year. TapTax Starter is £59.88 a year, a saving of at least £36 annually, and that is before you consider that Coconut's full feature set requires you to use its current account rather than your existing one.
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 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, but its MTD ITSA filing capability is lighter. For a sole trader whose primary software job is quarterly filing to HMRC, that gap matters.
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.
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.
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.
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.
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.
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.
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.
If you already have a bank account you like, paying extra to change it just to get tax features makes very little sense.
TapTax connects to your bank, categorises expenses automatically, and submits quarterly updates to HMRC. Free plan, no card required.
