What an FSCS Default Declaration Means for Crowdfunding and IFISA Investors

An FSCS default declaration is a formal decision that a financial services firm has failed and cannot pay claims against it. On 11 June 2026, the Financial Services Compensation Scheme (FSCS) declared Business Agent Limited, trading as NextCrowd and NextFin, in default.

However, this does not guarantee compensation. The FSCS assesses claims individually to determine whether they meet its eligibility requirements.

Think of the declaration as a step in the claims process, not a promise of payment. What happens next depends on the claim, the firm's regulated activities and the applicable compensation rules.

Key facts

If you invested through NextCrowd, the declaration may raise questions about your money, your claim and your tax position. This guide explains the official information available. It does not determine whether you qualify for compensation or how much you may receive.

What does "declared in default" mean?

The FSCS uses the term "in default" when a financial services firm has failed and cannot pay claims against it. Its default policy explains how it may investigate a firm's ability to meet its liabilities.

Under its general policy, the FSCS may contact the firm, request financial information and assess whether it can pay claims. If the FSCS believes the firm cannot meet those claims, it may notify the firm of its intention to declare default and give it an opportunity to object.

However, the policy does not apply to every case. It excludes defaults arising from certain formal insolvency procedures and other automatic triggers under FCA Handbook rule COMP 6.3.3.

Business Agent Limited entered administration in May 2025. The FSCS's published page confirms its subsequent default declaration, but does not establish which specific route under the default policy applied. It would therefore be incorrect to assume that the general procedure describes every step in this case.

What did the FSCS default declaration say on 11 June 2026?

The FSCS's Business Agent Limited page confirms that the firm was declared in default on 11 June 2026. It lists the firm as having failed on that date.

The FSCS also confirms that it will continue assessing claims individually and pay compensation to customers with valid claims. The declaration does not establish that every customer has a valid claim.

Earlier developments, set out on the FSCS page for the firm, are important too. On 9 July 2025, the FSCS opened its online claims service to people who believed they might have a claim against the firm.

On 27 February 2026, the FSCS said it had completed its investigation and moved submitted claims to its claims-processing teams. The June declaration was therefore a later step in an existing process.

What did the FCA say on 16 May 2025?

The FCA's statement on Business Agent Limited, published on 16 May 2025, confirmed that the firm entered administration on 8 May 2025. The Gazette notice and Companies House record provide further information about the administration. GOV.UK explains the administration process.

The FCA also confirmed that Business Agent Limited stopped being an HMRC-approved ISA manager on 9 January 2025. For holders of loan notes issued directly by Business Agent Limited, the FCA said they could submit claims as creditors in the administration for amounts owed by the firm. This is separate from an FSCS compensation claim.

At the time of the FCA statement, the regulator said the FSCS was investigating whether any claims met the qualifying conditions for compensation. It also confirmed that the firm remained authorised by the FCA and subject to its rules.

Earlier, on 22 July 2024, the FCA imposed restrictions following concerns about the firm's activities. These included concerns about holding client funds without the required permissions. These were regulatory concerns; they should not be presented as court findings.

What does the FSCS say it covers?

The FSCS may compensate eligible customers when an authorised financial services firm fails and cannot meet its liabilities. Its investment protection guidance explains the relevant conditions and limits.

For investment claims involving firms that failed after 1 April 2019, the FSCS can pay up to £85,000 per eligible person, per firm. This is a maximum limit, not a guaranteed payment.

Eligibility depends on the circumstances. The firm must have been authorised when the relevant service was provided, the activity must have been regulated, the claimant must have suffered a financial loss, and the firm must owe a legal liability.

The FSCS does not compensate investors simply because an investment performs poorly.

Three situations are often confused:

Firm failure: An authorised firm fails and cannot meet an eligible claim against it.

Poor investment performance: An investment loses value or produces less income than expected. This does not, by itself, qualify for FSCS compensation.

Borrower or issuer default: A business that borrowed money fails to repay it. This does not automatically create an FSCS claim against the platform or provider.

The important question is not just whether a firm failed. It is whether the firm carried out a regulated activity for you and whether your particular claim meets the compensation rules.

How do crowdfunding and IFISA investments fit?

An Innovative Finance ISA (IFISA) is a tax wrapper. The investment held inside it is a separate matter. For example, an IFISA can hold eligible peer-to-peer loans and certain crowdfunding debentures, as GOV.UK’s ISA guidance explains. The tax treatment of the account, the terms of the underlying investment and the firm's regulatory responsibilities are separate questions.

The ISA tax position

The FCA said Business Agent Limited notified customers on 4 December 2024 that it would stop being an ISA manager. Customers had 30 days to transfer their accounts to another approved ISA manager to retain the tax wrapper.

The firm stopped being an approved ISA manager on 9 January 2025. According to the FCA's guidance, ISA and IFISA accounts that remained with the firm after that date no longer benefited from the ISA tax wrapper. The investments could be treated as general investments and may attract tax charges.

This does not mean every investor will necessarily owe tax. Your position depends on your circumstances. Contact HMRC or seek independent tax advice if you are unsure.

The FSCS protection position

Crowdfunding protection requires particular care. The FSCS describes its protection in this area as very limited. It does not compensate investors simply because a borrower defaults or an investment loses value. It may, however, cover certain eligible claims involving regulated advice or other qualifying activities.

The FCA's consumer guidance on crowdfunding also explains the risks and limitations of protection.

The FSCS has declared Business Agent Limited in default, but this does not mean every investment arranged through NextCrowd is covered. The firm's failure and the eligibility of an individual claim are different questions. Investors should check the FSCS's specific guidance and submit a claim if they believe they may qualify. The FSCS will determine eligibility under the applicable rules.

The FCA has also advised investors to contact the issuers of their investments about matters such as shareholder votes, dividends and coupon payments. These matters are separate from the FSCS claims process.

How do I make a claim to the FSCS?

Start with the FSCS's page for Business Agent Limited. Select Check if you can claim to access the online claims service.

The FSCS confirms that making a claim is free. You do not need a solicitor or claims representative, and if you claim directly, you receive 100% of any compensation awarded.

Follow the instructions and provide the supporting evidence requested. This may include investment agreements, account statements, payment records and correspondence. Complete evidence can help avoid delays.

The FSCS assesses each claim individually. It cannot guarantee eligibility or a particular payment before completing that assessment.

You can subscribe to updates on the firm's FSCS page or call 0800 678 1100. You can also read the FSCS guidance on claim time limits.

What can I do now?

The following steps can help you understand your position.

1. Check the FSCS notice. Read the Business Agent Limited page and subscribe to updates.

2. Gather your records. Keep investment agreements, statements, payment records and emails.

3. Follow the administration. Read updates from the administrators about the firm's assets and creditors.

4. Check loan note claims. If Business Agent Limited issued your loan notes directly, review the administrators' information about creditor claims.

5. Check your ISA position. If you held an ISA or IFISA through the firm, contact HMRC or seek independent tax advice. 6. Contact investment issuers. Ask about relevant votes, dividends, coupon payments or other investment updates.

7. Watch for scams. The FSCS never asks for money to make a claim or pay compensation. If you receive unexpected contact, end the call and use independently verified contact details.

An FSCS claim and a creditor claim in an administration are different processes. Depending on your investment, you may need to check both.

How do I check the firm's status myself?

Use official records to confirm the latest position.

FCA Register: Search for Business Agent Limited using reference number 669880.

FSCS failed firms list: Check the latest FSCS listing and the firm's dedicated page.

Companies House: Review the company's filings and status.

The Gazette: Search the administration notice and any subsequent insolvency notices.

These records serve different purposes. Companies House records corporate filings, the Gazette publishes official notices, the FCA provides regulatory information, and the FSCS explains its compensation process.

Check the latest records before relying on a particular status or date.

What do people often mix up?

A declaration and a payment are different. The FSCS declaration confirms that the firm has failed for compensation-scheme purposes. It does not guarantee a payout to every investor.

Administration and FSCS default are different. Administration is a corporate insolvency process. An FSCS default declaration is a decision under the compensation scheme's rules.

An IFISA and FSCS protection are different. An ISA tax wrapper affects tax treatment. It does not automatically make the underlying investment eligible for compensation.

A platform and an investment are different. The failure of a platform does not necessarily mean the issuer of every investment has failed. Equally, the failure of an issuer does not automatically create an FSCS claim.

A creditor claim and an FSCS claim are different. A creditor claim seeks amounts owed by the company in administration. An FSCS claim is assessed under separate eligibility rules.

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Disclaimer: InteliCo provides information, not legal, tax or investment advice.