How Wise co-founder went from tech darling to tax list of shame
When the payments company Wise floated on the London Stock Exchange last summer it propelled its founders into the ranks of Britain’s richest people. But Kristo Käärmann, one of the Estonian pair who launched the firm, soon found himself on an altogether less desirable list: named and shamed as a tax defaulter by HM Revenue and Customs.
Käärmann was identified as having failed to pay £720,000 in tax, joining a series of restaurants, builders and even a strip club who had all fallen foul of the tax authority. HMRC describes the defaults as “deliberate”, but Wise insists it was a matter of keeping his “personal admin in order”.
With the UK’s Financial Conduct Authority investigating, that personal admin breach could end up being even more costly for a man whose innovation made him a darling of London’s tech scene. The FCA has the power to remove his approval to be a senior manager. If they were to do this, that would make it difficult for him to carry on leading the firm he built.
Käärmann grew up in Tallinn, Estonia’s capital, and attended university in its second city, Tartu, but the idea for Wise, originally known as Transferwise, came when he was working in London for Deloitte, one of the big four accountancy firms. When he tried to transfer his Christmas bonus to Estonia he was left out of pocket by £500 because of a unfavourable exchange rate, with a £15 fee adding insult to injury. That inspired him to set up an informal arrangement with an acquaintance from Estonia to mirror transfers on either side of the border – avoiding the ripoff.
The acquaintance, met serendipitously at a party in 2007, was Taavet Hinrikus, the second employee of Skype, a tech unicorn – the name for startups worth more than $1bn – bought by
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