Cutting the Crust: How Does Pie Plan to Disrupt the UK Tax Space?

Pie, a UK-based self-assessment tax app, aims to democratise tax for the masses – for free. With the UK government’s ‘Making Tax Digital’ initiative set to come into play next year, how does this app plan to make its mark? 

Launched in July 2023, Pie has already amassed 50,000 downloads and a customer base that has risen 588 per cent quarter on quarter. Promising to ‘untangle’ the complex UK tax system, it’s clear to see why so many freelancers and employees are already enticed by the highly accessible and affordable offering.

By leveraging open banking connections to users’ bank accounts, Pie enables customers to submit directly to HMRC for free (with optional add-ons), covering all income types in one place, as well as child benefits, pension contributions, student loans, and tax reliefs. Through its app, customers can mark expenses and tag invoices to access tax rebates more easily. To find out more about the offering, as well as Pie’s plans for the future, we chat with its founder, Tom McNally.

“We’re currently going through a seed investment round, which is gaining some great traction – all of our funding has been bootstrapped to date,” he said, explaining how the app continues to offer free services.

“The app and filing taxes through it is completely free – but there are optional add-ons for those looking for more support. Customers can choose from a range of affordable add-ons, such as additional tax support and a tax return check or even a full tax return service. We find that a strong percentage of customers do sign up for these add-ons, as it makes the process even more seamless”.

Pie also partners with a number of third parties who integrate its tax tools and technology into their own systems – another way to drum up additional revenue to support its ongoing operations. McNally explains that all funding goes back into making Pie “the most simple and affordable option on the market”.

Funding and partnerships

Having been bootstrapped to date, Pie is now going through a seed investment round. “After being the first company from the UK to make the Global final of the Startup Grind competition, we’ve also now become the first company to successfully crowdfund on Crowdcube without a lead investor,” added McNally.

“The seed round has only just gone live, but we’re already seeing some significant interest with over £200,000 of early access investment registered in the first 72 hours. This is great to see, as the demand and response to the product from across the UK has been really positive”.

Aside from raising funds to enable its future operations and plans, Pie has already netted some impressive partnerships. McNally broke them down and hinted at another incoming partnership with a UK bank:

“After Google recognised Pie as a high-potential startup, its head of growth reached out to offer hands-on marketing and technical support, which has been incredibly beneficial to our journey so far.

“Further, investment platform eToro (with 30 million global investors), signed a partnership last year, and with it, Pie became its exclusive tax partner – this has, of course, been a fantastic partnership for us and them – and is a significant sign of things to come.

“On that note, we’re also in discussions with a major high-street bank to become its sole tax partner too. Every company we partner with allows us to build and innovate further with our product and our service – ultimately, to ensure we can make tax simpler for more people than ever before”.

Addressing Making Tax Digital

The UK government’s Making Tax Digital initiative will come into play next year. The initiative will require businesses and individuals to keep digital records, use software that works with Making Tax Digital and submit updates every quarter, bringing the tax system closer to real-time.

Ultimately, the move aims to reduce the tax gap – which is the difference between the amount of tax that should, in theory, be paid to HMRC, and the amount that is actually paid.

However, concerns remain over whether these changes will add to the administration burden and complexity of filing tax returns – largely due to the requirement for quarterly submissions.

Recognising these challenges, the Pie app aims to help. McNally explains: “Firstly, the app itself is very simple to use and meets the Make Tax Digital requirements. With this, it will help people and businesses with the transition via a seamless user experience, fit with easy-to-follow prompts and product features. We’ve taken a lot of care and consideration when crafting the user experience, to ensure that anyone can log in and file their taxes with ease”.

There are also strong doubts over the overall awareness of the initiative at all – which could cause major issues when it rolls out next year. Pie has also thought about that as well:

“In terms of preparing those who aren’t in the know about the changes – we’ll be publishing news, blogs and advice on the topic on the Tax Pible – a source of truth for UK tax, with tax calculators, tips and more – as we approach the date,” McNally continued.

“Additionally, Pie’s resident tax expert Charlotte Baroukh, will be sharing advice on this via her socials, and speaking to the media – helping equip people with the knowledge they’ll need ahead of and during Make Tax Digital”.

Looking to the future

Finally, McNally explained Pie’s plans for the future, looking to become the latest firm to leverage AI in one way or another.

“As mentioned above, we’re going through a seed round. Through this, we’ll be able to build more features and continue innovating tax solutions for the self-employed and beyond.

“We’re really excited to be announcing one of these new product features very soon, as we’re developing the world’s first ever AI accountant. I can’t say too much about it right now, but it’s a first for us and the entire tax and accountancy industry.

“Further, as we grow and look to be an essential service for the UK as tax becomes digital for all, we are also looking to expand to additional markets across the globe”.

The post Cutting the Crust: How Does Pie Plan to Disrupt the UK Tax Space? appeared first on The Fintech Times.

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