The simple solution for sole trader and landlord.
Coconut is a simple accounting and tax app that makes it easy for sole traders to stay on top of their bookkeeping all year round, and easily share their records and receipts with their accountant through the Coconut Portal.
Coconut software is built specifically for the needs of your smallest clients, simple enough for them to engage with but smart enough to streamline and optimize your practice’s workflows.
Your clients can connect Coconut to 30+ current account and credit card providers so that they can keep all their business records organised. You can run your practice using Coconut for all your self-employed and unincorporated landlord clients, no matter who they choose to bank with.
Coconut provides banking, bookkeeping, invoicing and receipt capture to your clients in one simple tool. We categorise transactions ready for year-end accounts and tax filings in real-time, freeing you up to do the work your clients value most.
AIA Member Benefit
Join the Partner Programme as an AIA Member, you will receive an additional 10% discount on top of our direct offers, complemented by seamless client onboarding and a dedicated Account Manager.
Find out more about Coconut Join our partner programme
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What’s not to love about Australia? The seemingly continuous warm, sunny weather means people can enjoy their lives in the great outdoors for most of the year. Australia’s cities are ultra-modern and the natural environment is stunning, especially the beaches, which attract huge numbers (85% of Australia’s population live within 30 miles of the coast).
Brits love the land Down Under. There are no language issues, Aussies are a friendly, informal bunch, their culture is similar and many Brits have relatives and friends already in Australia. Reportedly, the number of UK citizens moving to Australia is at its highest level since 2012. Moving there allows Brits to leave behind the UK gloom, start a new life and enjoy better opportunities.
Moving to Australia can enable you to work fewer hours, earn more money and buy a nice house or flat, which isn’t possible for many young people in the UK. Australia is a great country to work, rest and play, which explains why more than 1.1m UK-born people now call Australia home. That’s 15% of Australia's overseas-born population and about 5% of its total population. If you’re thinking about moving to Australia, you’ll have many basic questions and want to know whether you’ll pay any UK tax.
Telling HMRC that you’re moving to Australia
You’ll need to tell UK tax authority HMRC if you’re leaving to go and live in Australia permanently or you’re going to work there full-time for at least one full tax year (ie 6 April to 5 April).
Top tip!
You must also tell your local council of your plans to leave the UK to live in Australia, so that you’re not charged Council Tax. Your UK citizenship will not be affected and you can usually vote in UK elections.
Paying tax if you’re non-resident
If you’re “non-resident” in the UK for tax purposes, no UK tax is payable on any income or gains that you earn or make in Australia.
Double taxation agreement
If you’re a non-resident in the UK for tax because you’ve moved to Australia, check out the double taxation agreement (DTA), because UK tax may still be payable on UK income. Look at the DTA between Australia and the UK:
Need to know! Seek professional guidance if you do not understand how to apply the DTA correctly. Articles, although they may seem simple, can be superseded by a later article, making your situation more complicated.
How much UK Income Tax will you pay?
If you’re eligible for the tax-free Personal Allowance (you don’t get it if your taxable income is more than £125,140 a year), you won’t pay tax on your total UK taxable income until it goes over £12,570 in a tax year (2024/25 figure).
Need to know! Non-resident British nationals are entitled to a personal allowance, when completing their tax return, by ticking Box 16 on form SA109.
You pay tax on your profit, which is the amount of UK income that remains once tax expenses or allowances have been deducted. If you rent out more than one UK property, the profits or losses from them all are added together and you will be taxed on the total.
The Income Tax band into which your total UK taxable income falls determines how much UK Income Tax you pay.
To help reduce your tax bill, you can claim tax reliefs and allowances. Income Tax is no longer automatically taken from interest on savings and investments, while non-residents do not usually pay UK tax on the UK State Pension or interest from UK government securities.
Australian income tax rates for 2024-25 (residents)
How to report your taxable UK income from Australia
If you live in Australia and have taxable UK income to report to HMRC, you must fill out and file a Self Assessment tax return (SA100), as well as the resident supplementary page (the SA109 form) to report your residence and domicile status.
Need to know! You cannot use HMRC’s online services to file your Self Assessment tax return and any supplementary pages if you’re in Australia. You can either fill out your forms by hand and send them by post, pay a UK-based accountant to do it online for you or use commercial Self Assessment filing software, which is cheaper and simple.
More on paying UK tax on UK rental income
If you earn more than £1,000 from renting out property in the UK, it can be subject to Income Tax, once your taxable income goes over the Personal Allowance (£12,570 a year in 2024/25). Capital Gains Tax can also be payable if you make a “chargeable gain” (ie you get more than the amount you paid for the property or land after selling it).
If you live outside of the UK for six months or more a year, HMRC classes you as a “non-resident landlord”. You can get the full amount of rent from your tenant(s) and pay tax on it via Self Assessment. If so, you must apply by filling out the NRL1i form and sending it to HMRC.
Alternatively, the tax you owe can be deducted by your letting agent or tenant, who must pay it to HMRC. They will deduct the basic rate of tax from the monthly rent (minus their expenses if an agency) and give you a certificate at the end of the tax year showing the tax that they’ve deducted.
You must keep accurate records of your rental income and tax expenses, because HMRC can ask for proof of the tax figures you report. You must keep your income and expense records for at least five years after the filing deadline for each tax year.
Need to know! As a landlord, you can claim “allowable expenses” to cover things you pay for to rent out your property. This can reduce your UK tax bill significantly. Visit GOV.UK for official guidance on paying UK tax on UK property rental income.
Visit getcoconut.com/accountants and www.gosimpletax.com/aia for more information.
Should you wish to join the Coconut Partner Programme as an AIA member, you will receive an additional 10% discount on top of our direct offers, complemented by seamless client onboarding and a dedicated Account Manager. Find out more here.
MTD for ITSA or Making Tax Digital for Income Tax Self Assessment to give it its full title. You remember that? Perhaps you’d prefer not to.
MTD for ITSA was due to be phased in from April 2024 for those with total gross income over £10,000 from self-employment and property in a tax year, with partnerships due to follow in 2025. But then, suddenly, in December 2022, the government announced a two-year delay in the planned introduction schedule, as well as a significant threshold increase up to £50,000 in the first phase and £30,000-£50,000 in the second.
So, why the delay? At the time, HMRC said: “Understanding that self-employed individuals and landlords are currently facing a challenging economic environment, and the transition to Making Tax Digital for Income Tax Self Assessment represents a significant change to taxpayers and HMRC for how self-employment and property income is reported, the government is giving a longer period to prepare for MTD.”
Did you know? MTD for ITSA’s introduction timetable has been delayed four times since it was first announced in 2015 (source: National Audit Office). So far, HMRC has spent some £1.3bn on introducing MTD for VAT and MTD for ITSA, but it expects to raise £3.9bn in additional tax revenue as a result.
MTD for ITSA: how will it change reporting?
For taxpayers and their agents who need a quick reminder…
● Under MTD for ITSA, many sole traders, freelancers and landlords will need to keep digital records using MTD-compatible software (or bridging software that enables them to comply with MTD reporting requirements while using their existing accounting software).
● Each quarter (ie every three months), the compatible software will create summary totals for business/landlord income and categorised expenses. These summaries are known as quarterly updates.
● After submitting an update, you or your agent can see an estimated tax bill within the compatible software. Making any accounting or tax adjustments is not essential before sending an update, but doing so will make the estimated tax bill more accurate.
● After the fourth quarterly update has been submitted, the system will show income and expenses for the whole tax year. Adjustments may then be made, for
example, claiming reliefs and allowances, removing disallowable expenses, adjusting the value of individual transactions, etc. Business/rental income will be finalised in the MTD for ITSA-compatible software, with an updated tax bill estimate given.
● To finalise your Income Tax position, you may need to provide HMRC with information about other personal taxable income (eg savings or dividend income).
● Then, you or your agent must make a final declaration via the MTD for ITSA software, confirming that the information provided is correct and complete and that your Income Tax position for the tax year has been finalised. A final declaration must be made, even if there is no additional taxable personal income to report. If your software does not support submission of additional personal income, you’ll be able to use your HMRC online services account for this.
● You must make your final declaration by 31 January following the end of the relevant tax year (5 April), if you want to avoid a late-submission penalty.
● The information you provide will then be used to work out your final Self Assessment tax bill for that tax year.
MTD for ITSA: revised introduction dates
From 6 April 2026, sole traders, freelancers and landlords with a gross income of more than £50,000 will need to comply with MTD for ITSA requirements or risk a penalty from HMRC. Those with an income of £30,000-£50,000 will need to do so from 6 April 2027. Many others will be able to join voluntarily before those dates, with HMRC believing that MTD will help them to eliminate basic tax-reporting errors and save time on tax admin.
So, what about those earning below the £30,000 income threshold? In 2022, the government said it was planning a review into the needs of such businesses, to consider how MTD for ITSA can be shaped to meet their needs and help them to fulfil their tax obligations. This review is ongoing, but eventual introduction is highly likely. Moreover, according to a report published in November 2023, the government also remains “committed to future introduction of MTD for ITSA to partnerships”, although no date has yet been given, following delay of its scheduled 6 April 2025 introduction.
Accountants, representative organisations and others working with sole traders, freelancers and landlords are being advised to remind them of the need to start to prepare for the introduction of MTD for ITSA in April 2026. This includes getting familiar with the new MTD for ITSA reporting requirements and making sure they have the necessary software.
A formidable new end-to-end accounting and tax solution?
You’ve probably already heard of Coconut. Some of your clients may already use it. Coconut was in fact launched in 2018 by Sam O'Connor and Adam Goodall as a digital current bank account for small businesses, but the ex-PwC fintech entrepreneurs pivoted their brand and Coconut became a bookkeeping/accounting app created with the needs of sole traders and freelancers in mind.
The early summer brought the surprise announcement that Coconut had been bought by GoSimpleTax, the Self Assessment tax return filing software solution. Sam O'Connor said: “The combination of GoSimpleTax and Coconut will create a formidable player in the accounting software space, filling the gap left by the traditional cloud players for a simple solution for self-employed people, landlords and micro businesses.”
Simple and efficient
As Adam Goodhall explained: “Coconut accounting software is a simple and efficient solution for self-employed people, landlords and their accountants and bookkeepers. It helps prepare the figures needed for tax filing, but doesn’t do the submission to HMRC.
Since 2015, GoSimpleTax has been providing tax-filing software for self-employed, property and other types of income taxed under Self Assessment.
“The combination of Coconut’s accounting software and GoSimpleTax’s tax return filing software and expertise will provide Coconut users and accountant partners with an end-to-end bookkeeping to tax return-filing solution, one that’s potentially suited to the needs of millions of UK taxpayers.”
Obvious fit
James Cryne, co-owner of GoSimpleTax, says there is an obvious fit between Coconut and GoSimpleTax. “They’re both remarkably easy to use and they provide many time- and money-saving features. Both have been created with the practical needs of small businesses and their accountants and bookkeepers as a key driver.
“GoSimpleTax continues to grow by attracting large numbers of new users, with many of them sole traders or landlords who also need bookkeeping support. Buying Coconut made perfect sense for GoSimpleTax. The link up provides significant added value for both GoSimpleTax and Coconut users.”
GoSimpleTax is retiring its own invoicing and bookkeeping solutions and users are being encouraged to start using Coconut instead. Cryne adds: “By December 2023, initial integration between GoSimpleTax and Coconut should be achieved, so that the necessary figures will automatically transfer from Coconut into GoSimpleTax, making it even easier for self-employed people, landlords, accountants and bookkeepers to fill out and file Self Assessment tax returns, saving them lots of time and hassle in the process.”
Software for accountants
The team behind GoSimpleTax previously started Keytime, which they built into one of the biggest suppliers of practice software for accountants. They have a lot of experience of providing software to accountants; the Coconut acquisition is a continuation of that.
“Accountants and bookkeepers who use Coconut should check out GoSimpleTax,” Cryne adds. “They can take advantage of a free trial. Partner subscriptions cost less than £60 for the tax year, which offers excellent value. We’ll certainly be encouraging GoSimpleTax users to use Coconut. Using both together makes perfect sense, because it offers a complete end-to-end solution.”
In a nutshell