Wise Chief, Kristo Kaarman, Fined for Defaulting on Tax Bill

One of the founders of money transfer provider Wise (formally Transferwise) Kristo Kaarman’s fine comes after he was found to have deliberately defaulted on more than £700,000 worth of tax.

The co-founder of one of the world’s leading online money transfer sites is in trouble with HMRC. A £365,651 fine is on the cards, but that could just be the start of his problems.

Kristo Kaarman founded TransferWise (now just known as Wise) in 2011 and has seen it grow into a multi-billion-dollar company. According to the latest estimates, the company which provides a low-cost alternative to international money transactions was worth £11.3bn.

HMRC issued the penalty over an unpaid tax bill of £720,495 in the year to April 2018. This, claims HMRC, made him a ‘deliberate tax defaulter’. Fines of this kind are issued to people who have been found to have engaged in deliberate concealment of their taxes such as submitting inaccurate documents.

According to recent figures tax evasion and tax avoidance cost the taxpayer 1.7bn every year, while tax evasion costs £4.6bn. The government has pledged measures to take action by people such as Kaarman who have been found to have abused the system.

However, the problems could just be starting for Kaarmann who also held positions as a management consultant at Deloitte and PwC. The Financial Conduct Authority may revoke an executive’s ability to carry out their role when failing to comply with standards of honesty.

The financial watchdog has announced a number of measures to crack down on both tax evasion and to improve accountability among senior executives. Earlier this month it announced an investigation of 153 ‘enablers’ of tax evasion. A spokesperson for the watchdog said: “We are increasingly looking to tackle those professionals who help facilitate tax crime, with around 150 such enablers under criminal .”

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