London-based tax technology startup Record OS has successfully secured $2 million in a pre-seed funding round. The investment, led by Episode 1, will fuel the development of its platform designed to simplify self-assessment tax returns for UK residents. The round also saw participation from angel investors with experience at prominent firms like Wise, Revolut, and Alphabet.
Addressing a Shifting Tax Landscape
The UK's self-assessment process has long been a source of confusion and stress for many taxpayers, often leading to errors and last-minute submissions. This system can result in penalties, investigations, or individuals missing out on important tax relief opportunities. Record OS aims to address these persistent issues by creating a more streamlined and reliable filing experience for everyone involved.
This initiative comes as the UK prepares for Making Tax Digital (MTD), a significant regulatory change mandated by HMRC. Starting in April 2026, self-employed individuals and landlords earning over £50,000 must submit quarterly digital updates. This threshold will progressively lower, bringing an estimated 1.7 million additional people into the digital system by 2028.
A Hybrid Approach to Tax Filing
Record OS distinguishes itself by integrating advanced software automation with essential human oversight. Users connect their financial accounts, allowing AI to categorize income, identify allowable expenses, and flag potential discrepancies. Crucially, every tax return is then reviewed and signed off by a qualified tax professional before final submission to HMRC.
This hybrid model provides a compelling alternative to existing options, offering professional verification for a standard fee of £125. It is more affordable than traditional accounting services while providing the human reassurance that purely software-based solutions lack. The platform is designed to fill a market gap for those who want both efficiency and peace of mind.
The company, founded by former Wise operators Dhruv Chadha and José Luis De La Peña, initially targeted accounting firms before pivoting to a direct-to-consumer model. This shift was inspired by personal experiences, including Chadha discovering an error in his own professionally prepared return while testing the platform. This highlighted the deep-seated need for a more accurate and trustworthy solution for individual taxpayers.
Investor Confidence and Market Opportunity
The $2 million investment underscores strong confidence in the startup's vision and the expertise of its founding team. The round was led by venture capital firm Episode 1, with strategic backing from an impressive roster of angel investors. These include former CFOs and senior leaders from successful technology companies such as Wise, Revolut, Deliveroo, and Alphabet.
Hector Mason, a general partner at Episode 1, highlighted the significance of the market shift. He stated, "The UK tax system is undergoing one of its biggest shifts in decades," praising the founders' deep operational experience. Mason expressed excitement in backing a team building what could become the default platform for digital tax filing.
With this new funding, Record OS is well-positioned to tackle the complexities introduced by the Making Tax Digital initiative. By combining AI efficiency with expert validation, the company offers a timely solution for the millions of UK taxpayers navigating the new requirements. The platform aims to transform a traditionally burdensome process into a seamless and reliable experience for the modern self-employed workforce.