How MHA, a Baker Tilly International member firm, supports Fintech startups
Date: 08 May 2025
Author: MHA London
MHA is the independent UK member firm of Baker Tilly International, a provider of audit, tax and advisory services. Our Founder & Chair, Susanne Chishti interviewed their Tax Partner, Peter Carville, Lead R&D Director, Kanika Mishra Pathak and the VAT & Indirect Tax Partner, Robin Prince to know how MHA is recognised as one of the fastest-growing challenger accounting firms, boasting a strong track record in the financial sector.
Susanne: What are the most popular Tax Services you offer startups?
Peter: Fintech businesses are faced with an increasingly complex landscape of regulation, compliance, investment and fiscal policy. We help our clients navigate this landscape at various stages of their growth, ensuring they stay prepared for future change.
In startup phase, it’s important to both seize opportunities and minimise cost. It is also essential to establish foundations for the future in terms of tax risk management.
Putting aside “the basics”, such as direct and indirect tax registrations and filings, it’s the specialist matters that need the most attention in the early days, namely R&D tax services and VAT. Not that I’m passing the buck to Kanika and Robin!
R&D credits can provide “above the line” P&L and cash tax benefits for the company. And it’s vital to get to grips with VAT compliance early, ensuring services are correctly treated as VAT-able or exempt, and that VAT recovery is maximised.
For international businesses, transfer pricing advice is critical to ensure that transactions between related companies are on a so-called ‘arm’s length’ basis as if the companies were wholly unrelated.
Susanne: Why is it important to plan your corporation tax process well with the right foundations and what impact can it have on future fundraising success?
Peter: It’s tempting to ignore the basics, i.e. getting tax returns in on time, considering tax governance and establishing strong procedures and controls. But late tax returns, HMRC penalties and the risk of additional tax cost will be of great concern to investors. This will be easily identified in due diligence and could impact investment.
Susanne: Which startups are eligible to claim R&D tax credits in the UK, and what R&D services do you offer?
Kanika: Companies that are undertaking design/development of novel technological solutions in the UK and are subject to UK corporation tax are the ideal claimant profile. This could entail development of entirely new technological/scientific solutions to solve real-world problems, or the application of existing technology in a unique or atypical way.
The key thing is – if your projects were not straightforward from the get-go and required several iterations/experimentations, this may well be an indicator you had to undertake R&D.
However, eligibility tends to be subject to the underlying technology stack and experience of the engineers who are involved in the project so when in doubt, do have a no expectations meeting with your friendly R&D advisor!
At MHA, we provide end-to-end R&D Claim services, starting with initial scoping to ascertain the potential benefit and ending with claim submission. We also support with advanced assurance forms (wherein HMRC approves the first 3 claims without any enquiries if satisfied) for first time claimants and enquiry support, alongside other innovation incentives such as Patent Box and Creative Sector Reliefs (e.g. VGTR).
Susanne: What are the biggest challenges in R&D claims and how can startups prepare themselves to be in the best possible position to make their claims successful?
Kanika: By far the biggest challenge for companies is giving HMRC sufficient information to evidence they undertook R&D, without being so technical-focused that a layperson may not fully grasp the gist of their projects. It’s a fine balance between brevity and detail, technology focus and storytelling, and one that does not often come naturally to engineers and developers.
Combined with high rates of attrition in technology startups/scale ups and lack of in-house records of R&D activities undertaken, this means that companies risk lengthy enquiries due to not providing the best/most robust examples of projects in HMRC forms. Often, this occurs at critical junctures of growth (during fundraising/M&A activity) jeopardising the health of a company’s financials and growth prospects.
This is where specialist advisors like us can best add value. Leveraging our experience in respective fields of science and technology, we are able to help companies present the best argument for their R&D projects.
It is really important that a company’s R&D methodology evolves with its operations, and we often advise companies on the best way to track R&D efforts, incorporate timesheet and capitalisation processes, refine third party contracts and arrive at a repeatable and defensible methodology.
We don’t believe in one-size-fits-all claim approaches, as every company is unique and startups with agile methodologies for example, need a different methodology than traditional firms who are still on waterfall development cycles.
We often advise clients on the development of contemporaneous methodologies to ensure R&D is tracked during the year rather than after, giving founders/investors the board comfort around their financial position.
This is even more crucial now as the new R&D benefit is ‘above the line’, so deducted from revenue to calculate gross profit for all companies regardless of size, and the EBITDA impact can be quite significant.
Susanne: What are the most popular VAT Services you offer startups?
Robin: For Fintech startups, getting VAT right from the outset is critical, not just to remain compliant, but to ensure tax efficiency as the business grows and evolves. We look to partner with Fintech startups to help them build a robust compliance process and maximise their VAT recovery position, particularly in the context of complex partial exemption rules that often apply in the sector.
We also work closely with clients to advise them on the correct VAT treatment of their new products and services, especially those involving crypto, embedded finance, or platform-based models, where the VAT treatment can be nuanced or uncertain.
Susanne: Which software tools do you recommend startups to use, how do you and your clients work together in practice?
Robin: We support Fintech startups by ensuring that they are using the right technology for their stage of growth, both to stay compliant and to lay the groundwork for scalable, efficient tax processes.
A key part of this is helping them build processes that are Making Tax Digital (MTD) compliant from day one. This often involves advising on the best combination of accounting systems and digital recordkeeping tools to meet HMRC’s requirements.
For clients operating internationally, we also support the adoption of e-invoicing and digital reporting tools, particularly in regions where this is mandatory (e.g., Italy, Poland, and increasingly other EU countries). We advise on both choosing the right software and integrating it into their finance stack.
We are an AIM-listed, top 13 UK accountancy firm, that is part of the global Baker Tilly network (top 9 worldwide). This uniquely positions us to provide top-tier service to start-ups and scale-ups for whom a larger organisation may not be the right fit and where smaller firms do not offer as comprehensive a range of services and deep an expertise as us.
Our Fintech team is comprised of Big 4 trained and industry professionals with extensive experience in financial services and Fintech, who can guide Fintechs and their founders with the holistic range of services required at different stages of their growth.
We truly take pride in being a people-first entrepreneurial firm and a trusted advisor to our clients – and believe in growing alongside our startup and scale up client base.
About the Authors
Robin Prince
VAT and Indirect Tax Partner
Robin is a Tax Partner specialising in VAT. He joined MHA in 2023, having previously headed the Indirect Tax team at Barclays Bank.
Robin is a member of the Chartered Institute of Tax and has over 20 years of experience in VAT and Tax Risk Management. His invaluable experience of having worked inhouse, managing the specific challenges and nuances of tax management within the banking sector uniquely equips Robin to provide practical, solution-oriented guidance that goes beyond theoretical knowledge.
Kanika Mishra Pathak
Lead R&D Director, B.E. (Computer Science & Engineering), MBA
Kanika started her R&D tax career whilst on her MBA placement at a boutique firm that specialised in R&D Tax. Soon after, she was recruited by a big 4 firm. Despite being based in London, she also supported the Northern market as technical lead during this role, with clients spanning across Leeds and Manchester.
In May 2021, Kanika joined a then up-and-coming R&D team within a financial and professional services firm, where she helped scale up the firm’s software-focused client base, establish governance procedures, and develop technology solutions to increase robustness and auditability of R&D claim methodologies.
In her time in the industry, Kanika has led claims for large and small organisations operating in the Financial Services, Fintech, TMT, Retail, Manufacturing amongst several others. She joined MHA due to its people-centric culture and the opportunity to build a truly progressive, tech-first team in the R&D space.
Peter Carville
Tax Partner, Chartered Tax Adviser (CIOT)
Peter is a Tax Partner in the financial services team. He joined MHA in 2024, previously having worked at a big 4 firm.
Peter has over 25 years’ experience in banking tax. He is a corporate tax specialist but drives delivery for all services to his client base. He has a hands-on approach to tax compliance and regularly engages with HMRC on disclosure and enquiry matters.
Peter works with a range of financial service institutions, including commercial and investment banks, challengers, exchanges and trading platforms. He has extensive in-bound international tax and business transformation experience.
Peter’s tax technical experience includes advising on profit and capital attribution, bank taxes, withholding tax, SDRT, securitisations and treasury tax matters. He is a member of the Chartered Institute of Taxation.
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