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42


STARTUP OF THE MONTH


FEATURE NAME


Coconut’s clients set up their stall on the beach


When doing your to-do list, tax returns are nobody’s favourite. And for the self- employed, managing taxes can be tedious. Sam O’Connor, CEO and co-founder of Coconut, tells how he sets out to solve beach/lifestyle conundrum


Tell us about your company…


Adam, my co-founder, and I met at PwC 10 years ago and we’ve worked together ever since. We qualified as chartered accounts and then left to start a fintech business together – we’d had enough of corporate life by that point so it was an exciting time.


After we sold our first business in 2014 we became freelances, which was definitely a no brainer having had a taste of working for ourselves. But then we discovered how hard it is to manage money as a self- employed business – there’s a lot of stuff you take for granted as an employee which you suddenly have to do yourself.


In our recent survey of over 500 freelances we found that the main issues that they have are expenses, budgeting for tax and submitting their tax return. When you’re trying to get more clients, earn more money and do great work, managing your money is really the last thing on your mind so it creates a lot of headaches.


All the products that are sold to us as a solution to these problems are built for bigger businesses. And on top of this, banks were throwing up hurdles to us opening even the most basic current accounts. So it made perfect sense that we should build a current account you can open quickly that meets the needs of self-employed people and freelances. Coconut manages money in a much more automated way and solves these major issues for a really underserved and growing community.


What is your business model?


We recently launched our Beta iPhone app for sole traders. It’s a current account you can open in a few minutes. We send a debit card in the post and it automatically categorises the user’s expenses and estimates the tax. It’s been a great few weeks getting our first customers on board and the feedback has been awesome. We’ll be releasing our Android and limited company products later this year.


There currently aren’t any other smart banks solving tax issues for self- employed people. It’s an area and a community that really needs some attention, especially with Making Tax Digital – which is the biggest shakeup of the tax rules for 20 years – on the horizon. Soon all small businesses including self-employed people will be required to submit digital records and the tools just don’t exist to do it properly – we’re solving that.


Sam O’Connor (left) and his Coconut co-founder Adam Goodall


Our Start tier is free and includes the main things needed when starting out, such as expense management and tax estimates. Later this year we will launch our Grow tier, which will cost £4.95 ($6.91) a month and have features such as VAT management.


We want our customers to have the tools that they need to manage their money day to day. Longer term we will integrate with accounting packages and HMRC so that customers can work easily with their accountants and submit taxes. Our aim is to eliminate 80% of the work that customers and accountants do around accounting, and there’s a lot of excitement about this.


What sets you apart from the competition?


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