Accountants for fintech startups

Fintech: your own money and client money are not the same thing.

Regulatory capital, safeguarded funds and a share register that an FCA application will read — three things that make fintech accounting different from ordinary software.

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The short answer

We act for UK fintech startups: keeping client and safeguarded money visibly separate from the company's own, keeping regulatory capital where it needs to be, claiming R&D relief on genuine engineering, and keeping a share register that will stand up to an FCA change-in-control review.

Fintech is software with a regulator attached, and the accounting differences all follow from that. Money that passes through your business is not your money, and treating it as though it were is the fastest route to a very bad conversation.

The second difference is that your balance sheet stops being a private document. Capital requirements have to be met continuously rather than at year end, and an FCA authorisation or change-in-control application will look closely at both your numbers and your ownership. A share register assembled casually in year one becomes a problem in year two.

Where the money actually goes

What makes fintech accounting different

Client and safeguarded money

Funds held for customers are not revenue, not cash and not yours. They need separating in the records as clearly as they are separated in the bank, and reconciled far more often than monthly.

Regulatory capital

A capital requirement has to hold continuously, not just on the balance sheet date. That changes how you plan a hiring round or a marketing push, and it needs to be in the cash model rather than checked afterwards.

Revenue that is not what it looks like

Interchange, spreads, subscription and float income behave differently and are recognised differently. Netting them together produces a revenue line nobody can interrogate, including you.

A share register under scrutiny

Change in control is a regulatory event. Who holds what, and who counts as a controller, is something the FCA will examine — so the register has to be right rather than roughly right.

R&D relief in this sector

Where fintech claims usually sit

The same test applies as anywhere: an advance in the field, resolving uncertainty a competent professional could not readily deduce. Building a well-made app on mature frameworks does not qualify, and a great deal of fintech development is exactly that.

What tends to qualify is the harder half: transaction processing at a scale or latency where the standard architecture demonstrably fails; fraud and risk models where it was genuinely unknown whether the approach would work; and integration work with legacy banking infrastructure that required real experiment rather than following documentation.

Watch the PAYE and NIC cap. Fintech teams lean heavily on contractors, and the cap — £20,000 plus 300% of your PAYE and NIC bill — is what turns a large claim into a small payment. There is an exemption, but it requires that connected-company subcontractor and externally-provided-worker costs are no more than 15% of your qualifying R&D spend, which a contractor-heavy team will often fail.

How we handle R&D claims SEIS and EIS

A worked example

The cap that makes a large claim disappear

A loss-making UK fintech, engineering delivered mainly by contractors invoicing through their own companies. Qualifying R&D for the year: £500,000. PAYE and National Insurance, because almost nobody is on payroll: £30,000.

Intensive route credit, before the cap: £500,000 × 186% = £930,000 surrendered, at 14.5% = £134,850.
The cap: £20,000 + (300% × £30,000) = £110,000.
The claim exceeds it — and under the intensive route a claim above the cap is invalid, not merely restricted.

The same company with six of those engineers on payroll instead, taking PAYE and NIC to £120,000, would have a cap of £380,000 and receive the credit in full. That is a hiring decision, made eighteen months before the claim, worth more than six figures. It is also why we model the cap before anybody writes an R&D credit into a cashflow forecast.

Illustrative figures, chosen to show how the arithmetic behaves. Your numbers will differ, which is exactly why the calculation gets done before anything is filed.

What we do for you

The job, end to end

Client and safeguarded money separated in the records and reconciled on a real rhythm
Regulatory capital built into the cash model rather than checked at the year end
Revenue lines that can be interrogated separately rather than netted into one number
R&D claims with the PAYE cap and the 15% connected-party test modelled before you rely on the cash
A share register and PSC position that will survive a change-in-control review
SEIS and EIS where the company qualifies, with the assurance obtained before you pitch

Questions

Straight answers

Is client money part of our revenue?

No, and treating it as though it were is one of the more serious mistakes available to a fintech. Funds held for customers are neither revenue nor your cash. They should be as clearly separated in your records as they are in the bank, and reconciled on a rhythm that would satisfy a regulator rather than an accountant.

Can a fintech claim R&D relief?

Often, but not for building the app. Claims usually rest on transaction processing at a scale or latency where standard architecture demonstrably fails, fraud and risk modelling where the outcome was genuinely unknown, or integration with legacy banking infrastructure that required real experiment. Ordinary product development on mature frameworks does not qualify.

Our engineers are contractors. Does that affect our claim?

Yes, in two ways. Contractor costs are restricted rather than claimed in full, and the payable credit is capped at £20,000 plus 300% of your PAYE and National Insurance bill — which is small if very few people are on payroll. There is an exemption, but it requires connected-party subcontractor and externally-provided-worker costs to be no more than 15% of qualifying spend. Model it before you write the credit into a forecast.

Do you handle FCA-regulated reporting?

We prepare the accounting and keep the capital and client-money position visible and reconciled, which is what most early-stage firms need. Where a specific regulatory return or a client-assets audit is required, that needs a firm with the relevant registration and we will tell you plainly rather than attempting it.