For many FinTech businesses, tax risk and regulatory compliance are managed in separate silos. The finance team handles statutory filings and tax returns; the compliance team focuses on FCA requirements, data security and AML controls. But in reality, the boundaries are blurring – fast. Increasingly, decisions in one area have a direct impact on the others, and CFOs who fail to connect the dots can find themselves dealing with costly surprises.
The growing link between tax and compliance
Historically, tax authorities and regulatory bodies operated with very different remits. Today there is much more collaboration and information sharing between them. HMRC, for example, is becoming more sophisticated in how it uses data from other agencies and from public sources such as Companies House. That means a compliance breach can spark a tax enquiry and vice versa.
For FinTechs this shift is particularly important because their business models often combine financial services activity, digital delivery, and international reach. Each of these comes with its own regulatory obligations and tax complexities, and the crossover points are where problems often start.
Where the collision happens
Several high-profile examples show how tax and compliance issues now overlap:
Research & Development (R&D) tax relief scrutiny
HMRC has stepped up its review of R&D tax relief claims, particularly in sectors like FinTech where innovation is high but the definition of qualifying work can be nuanced. Weak documentation not only risks losing the claim, but can trigger wider compliance reviews, including governance and risk controls.
Share schemes and IR35
Equity incentives have tax benefits when structured correctly, but if they involve contractors caught by IR35 rules, or misclassified workers, there can be PAYE and NIC liabilities alongside employment law implications. What starts as a tax query can quickly become a regulatory employment status investigation.
VAT on digital services
The rules around VAT for cross-border digital services are complex and evolving. Missteps here are not just a tax problem. They can also breach consumer protection laws and digital service regulations in certain jurisdictions, bringing compliance teams into the mix.
Why CFOs need a joined-up approach
The common thread in these examples is that risks often emerge in one area but escalate because no one has oversight of the whole picture. A CFO with an integrated view across finance, tax and compliance is better placed to spot patterns and resolve issues before they multiply. This means breaking down internal silos and making sure tax advisors, compliance officers and finance leads share information regularly, rather than only when something goes wrong.
Building a cross functional risk framework
A practical step is to map out where your regulatory obligations overlap with tax processes. Identify key trigger events such as hiring contractors, launching products in new markets, or applying for funding, and agree in advance how tax and compliance checks will be carried out together. Regular joint reviews between tax and compliance advisors can help ensure that processes are not only technically correct but also aligned with broader risk appetite.
The role of outsourced expertise
For scale-up FinTechs, internal teams often do not have the bandwidth to maintain deep technical knowledge in all three areas. Partnering with advisors who can operate across tax risk and compliance gives you a single point of accountability and reduces the chance of gaps between disciplines. The most valuable partners are those who understand the commercial context as well as the regulatory detail so that advice is not just compliant, but also pragmatic and growth focused.
The lines between tax and regulatory compliance will only become more blurred as technology regulation and international tax rules evolve. CFOs who take a joined-up approach now will be in a much stronger position to protect their business reputation, manage investor confidence, and keep growth on track without being derailed by unexpected compliance costs.
Reach out
If you saw any of yourself in the above points, ask yourself whether your position could be strengthened by our My Tax Partner service. Acting as your embedded strategic tax director, we bring a joined-up perspective across finance, tax, and compliance, ensuring that risks don’t slip between the cracks. Instead of reacting when issues escalate, you gain proactive oversight, coordinated advice, and a tax strategy that strengthens your overall compliance framework.
For FinTech CFOs, that means fewer surprises, smoother investor interactions, and greater confidence that regulatory complexity is being handled in step with your growth plans. With My Tax Partner, you don’t just keep pace with change, you stay ahead of it.
Want to learn more? Reach out and let’s talk.
