A&M Indirect Tax services

Fintech, the use of technology to enhance and automate the delivery of financial services and products to customers, is a massive disrupter in the financial services sector.  Fintech businesses have seen incredible growth over the last 5-10 years.  

These businesses are innovative and dynamic, and frequently, grow quickly.  VAT can represent a risk, particularly when back-office functions don’t quite keep pace with the business’s revenue growth as the Fintech scales-up.  It is therefore critical that Fintechs receive practical and comprehensive advice that helps the businesses manage these challenges and complexities.

A&M prides itself on being as flexible and commercial as our clients.  We can help businesses deal with VAT risks and identify any opportunities to optimize the VAT position.

How A&M can help:

We can assist Fintechs in determining whether services supplied – either as principal or as an intermediary – are subject to the VAT exemption.

VAT advisory services can be a valuable tool for Fintech businesses, from both compliance and advisory points of view. Fintechs, particularly those that are in the early stages of their development, may be able to claim input VAT recovery on their pre-trading costs, including expenditure on research and development.

Fintech companies are more likely to invest in technology, which is generally subject to VAT and a high cost, and therefore the nature of sales and purchases makes it even more important for VAT recovery to be streamlined. 

The VAT treatment of Fintechs’ supplies in the UK and EU is constantly evolving, as new emerging technology trends and advancements are being developed continuously in the sector and tax authorities are reacting to this new landscape. 

How can A&M add value? 

• Agree with HMRC special partial exemption methods (“PESMs”) for partially exempt Fintech companies or optimise the usage of the Standard Override Method (“SMO”) 
• Assist with the application of the “Specified Supplies Order 1999” to recover VAT charged on costs on the supply of VAT exempt insurance and financial services to customers outside of the UK 
• Helping Fintechs throughout their pre-sales and growth stages maximise intention-based recovery rules during times where high costs are accumulated, to manage cash flow 
• Structuring Fintech business transactions in a way to minimise VAT cost and maximise VAT recovery
• Advising on the correct VAT treatment for online marketplaces and platforms
• Assistance with regulatory compliance including payment systems compliance 
• Utilize market-leading technology to reduce time and save costs by automating VAT compliance, providing an end-to-end service offering
• Liaison with the UK tax authority (HMRC) including dealing with enquiries, disputes, penalties, and interest charges

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