A third-party software failure led to led to incorrect tax statements. Now Wise is paying the bill.

Wise is in talks with HM Revenue & Customs about a bulk settlement for UK customers who overpaid tax because of incorrect statements issued between 2021 and 2025, according to the Financial Times. This resulted from a third-party provider’s software failure. Rather than leave each customer to sort out their own tax return, the payments company plans to settle the bills itself. Wise built its reputation on being cheaper and more transparent than the banks.

There’s a broader lesson. Fintechs that started with payments and currency exchange are now offering savings and investments, and once they do, they have to get the tax and compliance work right, just as banks do.

Where It Went Wrong

The issue relates to Wise Interest and Wise Stocks, the products that let customers earn a return on their balances. Behind them, customers’ money goes into investment funds, some of them based offshore. Those funds don’t pay income out as cash. They reinvest it, and HMRC can still tax it as “excess reportable income”.

This is one of the more complicated areas of UK personal tax. Depending on the fund, that income counts against either the savings allowance or the dividend allowance. It is added to the customer’s base cost so it isn’t taxed twice. Customers can also make capital gains whenever money moves out of a fund, including when they simply spend from their Wise account. Wise’s tax statements were meant to help customers work through this. Its own guidance says the statements are “for guidance only” and that Wise “doesn’t withhold or pay any tax” for customers. But customers relied on those numbers, and for four years a limited number of these were wrong owing to a third-party provider’s software failure.

Why It Matters Now

Interest-bearing accounts grew quickly after 2022, when central banks began raising rates. Wise, Revolut and others sold them as an easy way to earn on spare cash. Customers were told it was simple, but the tax underneath was anything but.That gap between how simple a product looks and how complicated it is underneath is now the main risk for fintechs as they grow. Revolut is now valued at $115bn largely on the expectation that it can become a full bank. Being a bank means meeting banking standards on fraud, lending and tax reporting. When Nubank lost $6bn in value in a day, it showed how quickly investors react when a fintech’s growth story runs into problems.What HMRC Gets Out of It

A bulk settlement is the sensible approach for everyone involved. HMRC avoids handling thousands of individual amended tax returns, and customers avoid paying accountants to correct a mistake that wasn’t theirs. Wise gets to cap the cost and close the matter. HMRC is already under pressure from MPs over how it handles high-profile tax cases, so it will be glad of a tidy outcome.

Two questions remain unanswered: how many customers were affected, and how much Wise will pay. Until both are known, it is hard to judge whether this is a minor administrative fix or a sign that Wise’s controls were weak.

My Read

Wise deserves credit for paying the bill rather than leaving customers to deal with HMRC themselves. Many companies would have referred customers to the small print saying the statements were for guidance only. But four years is a long time for the statements to have been incorrect. Regulators will ask how that happened, and so will investors in Europe’s fast-growing fintech sector. Fintechs that offer savings have to get the tax reporting right from the start, because the regulators and customers will judge them by the same standards as any bank.