What is FinTech?
References to ‘FinTech’, or Financial Technologies, have been on the rise over the last few years – but what falls into this category?
FinTech largely applies to technology used within the financial services sector, largely by the institutions themselves, but also new innovations that are being introduced more and more into our everyday lives, such as mobile payments, fundraising tools and asset management.
Recent figures have indicated that global FinTech investment has more than doubled over the past year from $51bn to $112bn, so this area of innovation should by no means be considered minor.
Within the UK specifically, the FinTech sector is continually on the rise with companies such as JPMorgan Chase in talks to purchase a stake in 10x Future Technologies, a banking technology start-up founded by former Barclays chief Antony Jenkins. With so much investment happening, this is a hotspot for research and development.
Innovation is ubiquitous with this sector, with UK Fintech businesses renowned for their increasingly experimental, versatile and progressive techniques that are shaping the future of development in this industry.
What is R&D in Fintech?
Research and Development (R&D) tax relief is awarded to businesses that invest in innovation. This innovation can be in the form of developing new systems, processes, products, materials, devices, or any changes to the way your business works.
R&D often occurs in FinTech when attempts are made to ‘resolve scientific or technological uncertainties’, often by creating new processes or products, or improving existing processes or products. Some examples of this in the Fintech sector include, but are not limited to:
- Algorithms
- Database management
- Stress testing
- Machine learning
- Stress testing
- AI
While many of us are aware of some of the more well-known FinTech innovations such as Bitcoin and Crowdfunding, this terminology often refers to developments within the back-office of financial businesses; keeping up to date with governance and regulations, reducing risk, errors and costs and the avoidance of money laundering to name a few.
Working with tax relief specialists
Although many accountants claim to be able to complete your R&D tax claim for you, the complex nature of this area of tax often requires a specialist. We recommend Catax, an industry leading tax consultancy who specialist in this form of tax relief. They employ over 100 members of staff across the UK, with an office in Glasgow, and can guarantee to maximise the claim that is made on your behalf.
Catax are the only tax relief company who can claim partnerships with some of the UK’s top accountants and solicitors, as well as the Law Society, ICAEW, and the IFA amongst other industry bodies. This adds a level of assurance to their clients that they are working with the best in the business, and their claim will be managed properly.
So far, they have helped clients claim back over £242m in tax relief, which is often invested back into the business to fund further research projects, hire new staff or to improve business premises. As mentioned above, this is a relief that HMRC encourage businesses to claim as the money often goes back into the UK economy, so there really isn’t any reason not to try it!
If you’re interested in finding out whether your business could make a claim, please contact Catax on 0300 303 1903, or email enquiries@catax.com for a free consultation.
