UK financial watchdog investigates Wise chief over tax default

The UK’s Financial Conduct Authority has launched an investigation into Kristo Käärmann, the co-founder of payments app Wise, over deliberately defaulting on tax payments.

The investigation comes after HM Revenue & Customs included Käärmann, a billionaire, on a list of individuals who had received a penalty over the matter, in a document published last September.

Käärmann’s default relates to an outstanding tax bill of £720,495 for the 2017-18 tax year, which led to a fine of £365,651 by HMRC.

David Wells, chair of Wise, said on Monday that the board took Käärmann’s tax default and the FCA’s investigation “very seriously”.

“After reviewing the matter late last year the board required that Kristo take remedial actions, including appointing professional tax advisers to ensure his personal tax matters are appropriately managed,” he added in a statement.

Wells said the board continued “to support Kristo in his role as CEO”.

Käärmann, and others who were named, will remain on the list for 12 months from its publication, for deliberately filling erroneous tax returns or deliberately failing to comply with their personal tax obligations.

The board of Wise conducted its own investigation with external legal advisers at the end of last year before passing the findings to the FCA. Wise said that Käärmann “intends to co-operate fully” with the investigation.

Käärmann owns about a fifth of Wise, which listed on the London Stock Exchange last year with a value of £8bn, making it one of the most valuable companies in the UK’s fintech sector.

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