Coconut
Coconut is a UK business current account designed for sole traders, freelancers, and landlords. It stands out by auto-calculating tax on every transaction, using open banking to connect directly to HM…
💬 Verdict
Coconut is a solid choice for UK sole traders and landlords who want a free, straightforward account that eliminates tax guesswork. Its automatic tax calculation and accountant collaboration are genuinely useful. However, if you need FSCS protection, credit options, or phone support, look elsewhere—consider Starling Bank or Tide.
Coconut
Free plan available — no credit card required
📊 Pros & Cons
Pros
- 👍 Auto-calculates tax on every transaction, taking the guesswork out of knowing how much to set aside for HMRC.
- 👍 A genuinely free tier with no monthly maintenance fee, making it accessible for freelancers and landlords just starting out.
- 👍 Built specifically for UK sole traders and landlords, with relevant categories and features that generic business accounts don't offer.
- 👍 Direct accountant connect gives a secure, live feed that your accountant can view without back-and-forth file sharing.
- 👍 Open banking integration lets you see linked financial accounts alongside your Coconut balance, giving a fuller picture of your money.
Cons
- 👎 Not a traditional bank — it's an e-money account, so balances are not protected by the FSCS.
- 👎 Only designed for sole traders, freelancers, and landlords; limited companies and partnerships are not eligible.
- 👎 No business loans, overdrafts, or credit products available inside Coconut.
- 👎 App-first experience with no physical branch and limited phone support, which may not suit those who prefer face-to-face service.
- 👎 Free tier may have transaction limits or fewer advanced features compared to the premium plan, which could cost extra.
🎯 Use Cases
This is Coconut's core feature — every transaction is categorised and tax is estimated automatically on each payment, making it easy to set aside the right amount.
Coconut includes property-specific expense categories and tax calculations that help landlords manage rental income and deductible costs in one place.
The direct accountant connect means both you and your accountant can see the same live data, saving time and reducing errors around tax season.
Open banking integration gives a real-time view of linked accounts, though it focuses on tax calculations rather than deep cash-flow analytics.
Coconut's intuitive expense categories and receipt capture make day-to-day bookkeeping easier for non-accountants.
🔍 Deep Dive
The free tier has no monthly fee, but there may be charges for certain services like faster payments, card replacement, or international transactions. Optional premium features or accountant integrations can add cost, so check the latest fee schedule before relying on it for complex accounting.
Minimal — the app is designed for non-accountants, with instant transaction categorisation and prompts that make setup and daily use straightforward.
Limited companies, partnerships, businesses with complex VAT, or anyone who needs a full-service high-street bank with loans, overdrafts, and human branch support.
❓ Frequently Asked Questions
Is Coconut a full bank?
No, Coconut is a fintech platform that provides an e-money account via an appointed bank partner (ClearBank). Your funds are safeguarded, but the account is not covered by the Financial Services Compensation Scheme (FSCS) in the same way as a high-street bank account.
Is Coconut really free?
There is a genuinely free tier with no monthly account fee. Some optional features or premium plans may cost extra, so it's worth reviewing the latest pricing before signing up.
How does the auto tax calculation work?
Coconut categorises each transaction and uses your income, expenses, and known tax rates to estimate tax owed in near real time. It's a practical guide to help you set aside money for tax, not a substitute for professional tax advice.
Can I use Coconut if I have a limited company?
No. Coconut is built specifically for UK sole traders, freelancers, and landlords. Limited companies and partnerships are not supported.
Can my accountant connect to my Coconut account?
Yes. Coconut gives you a secure direct link to invite your accountant, allowing them to view live transactions, tax calculations, and reports without exporting spreadsheets or passing data back and forth.
What documents do I need to open an account?
You'll typically need to be a UK tax resident, be self-employed, a sole trader, or a landlord, and provide proof of identity and address. The application is app-based and usually takes just a few minutes.
Is my money protected with Coconut?
Your money is safeguarded with an approved financial institution, but because Coconut is an e-money account, it is not protected under the FSCS. This means you do not have the same deposit protection guarantee you'd get with a traditional UK bank.
