jlend
Member of DD Central
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Post by jlend on Sept 20, 2017 11:16:16 GMT
stuartassetzcapital , why is that AC include any new lender incentive payment (eg. from the Love Money / MoneySupermarket cashback offers) on the Tax Statement as " Other Declarable Income"? Every other P2P platform I know of works on the basis that such a payment, made by the platform and not linked to specific loans, is simply an "incentive to lend" and so not liable to tax under HMRC guidance. The word "Declarable" implies that AC believes such a payment should be declared to HMRC; is that the case, or might the heading be changed to "Other Income" instead? Hi Steve We can’t offer tax advice. Our understanding is that loyalty rewards are taxable income and we have treated it as such. Should you query this, please speak to HMRC or a qualified tax adviser who can help you get more clarity. If you have a specific piece of advice from any of those other platforms we would be very happy to look at them but our current advice received is designed into the report. Take your point that perhaps we should mark it in a new column called other income and people can follow their own advice then. Have fed back. I remember the news and feedback on the subject when trail commission on investments was taxed. www.accountingweb.co.uk/business/finance-strategy/investors-face-tax-on-share-loyalty-bonusesAt the time at least HMRC said cashback was not taxable. HMRC dismissed claims that cashback in other industries could be taxed. A spokesman told The Telegraph: "There is no question of tax becoming payable on cashbacks received from credit, debit and loyalty cards or any other kind of cashback payment. Trail commission is taxable because it is a further taxable distribution from the fund but in a different form and this means there is no read across to cashbacks."
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Sept 20, 2017 11:28:57 GMT
Hi Steve We can’t offer tax advice. Our understanding is that loyalty rewards are taxable income and we have treated it as such. Should you query this, please speak to HMRC or a qualified tax adviser who can help you get more clarity. If you have a specific piece of advice from any of those other platforms we would be very happy to look at them but our current advice received is designed into the report. Take your point that perhaps we should mark it in a new column called other income and people can follow their own advice then. Have fed back. Interesting. I thought cashback was not taxable and loyalty commission was as per these examples from accountant performanceaccountancy.co.uk/tax-bank-rewards/On the AC statement it says cashback. I think its complicated by the involvement of a third party which turns it into a psuedo referral payment which do appear to be taxable (eg Nationwide/Zopa referrals are taxable) Just to show how confusing it is the comments made in the article regarding Barclays Blue are incorrect. It was taxable until Dec 16 fee or no fee, it now isnt because they changed it to a cashback reward for making a DD payment rather than being treated as an annual payment like Halifax or Coop rewards (Coops bonus for DC payments arent taxable) Only people who can provide a definitive answer are HMRC ISTM
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steve11523
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Post by steve11523 on Sept 21, 2017 17:02:05 GMT
Could Assetz please restore the facility to edit the dates for the tax statement. I am investing through a company with a different tax year.
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Post by mead187 on Sept 22, 2017 17:49:08 GMT
Could Assetz please restore the facility to edit the dates for the tax statement. I am investing through a company with a different tax year. Seconded...
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Post by chielamangus on Sept 22, 2017 17:56:59 GMT
And thirded. I do tax statements every month .
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baldpate
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Post by baldpate on Sept 23, 2017 11:09:02 GMT
Me too - I use it monthy as an easy way to update my 'All-time earnings' record.
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mikes1531
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Post by mikes1531 on Sept 24, 2017 1:56:12 GMT
Me too. Sometimes I need tax data for different periods.
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r1200gs
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Post by r1200gs on Sept 25, 2017 10:11:24 GMT
Me too. Sometimes I need tax data for different periods. Can I just add to this. I too need data for different dates for overseas tax authorities.
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jo
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Post by jo on Sept 25, 2017 10:57:03 GMT
Me too. Sometimes I need tax data for different periods. Can I just add to this. I too need data for different dates for overseas tax authorities. What fresh hell is this please Assetz?
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Post by crabbyoldgit on Sept 27, 2017 19:38:27 GMT
My wife has a account here and with a small income from self employment plus the interest from AC bounces along nicely just under the tax allowance .We filled in her self assessed tax return for 2016 /2017 using the full interest earned before the new figures became available, as because she is a non tax payer reclaiming losses against tax she does not pay is a waste of time. Now i see the £2000 ish interest we declared should have been about £700. She has actualy never had a loss on AC all money has been recovered.But here is the rub if I understand things correctly ,if I correct the tax declaration to £700 next year if there are no losses in the year 2017/2018 she may be in the position that self employed income plus interest earned plus recovered capital from the previous tax year, which I think will count as income,pushes her over the tax allowance!!.So she gets a tax bill she would not have had under the old system, so no we are not going to use the figures now provided and if it gets complicated so be it unless i have been a stupid old git ,very likely, and somebody can please put me straight.
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mikes1531
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Post by mikes1531 on Sept 28, 2017 22:15:46 GMT
My wife has a account here and with a small income from self employment plus the interest from AC bounces along nicely just under the tax allowance .We filled in her self assessed tax return for 2016 /2017 using the full interest earned before the new figures became available, as because she is a non tax payer reclaiming losses against tax she does not pay is a waste of time. Now i see the £2000 ish interest we declared should have been about £700. She has actualy never had a loss on AC all money has been recovered.But here is the rub if I understand things correctly ,if I correct the tax declaration to £700 next year if there are no losses in the year 2017/2018 she may be in the position that self employed income plus interest earned plus recovered capital from the previous tax year, which I think will count as income,pushes her over the tax allowance!!.So she gets a tax bill she would not have had under the old system, so no we are not going to use the figures now provided and if it gets complicated so be it unless i have been a stupid old git ,very likely, and somebody can please put me straight. AIUI -- and I'm definitely not qualified to give advice on the subject -- reporting these losses is optional. And you only have to report recovery income if you reported the loss in a prior year. If I were crabbyoldgit's wife, I wouldn't report the £1300 of losses. And if any of those loans generate recoveries in future years, I wouldn't report those either. The fun will start when HMRC are given future years' info from AC and note the difference between the income AC show and what was reported as income for the year. ISTM that it ought to be possible to explain to HMRC why the recoveries weren't reported when received, as long as appropriate records are kept, but there's bound to be a fair amount of aggro involved. (If anyone hasn't already discovered it, if you download the CSV data you'll have a detailed list of all the components of the numbers on the tax statement, and can see how the losses relate to your loans.) In my case, I had a fair amount in Leeds (#45) and that was shown as a 2016/17 loss, making my total 'income' for that year very negative. That loan was recovered completely in 2017/18 tax year. I don't want to have to try and explain to HMRC why my AC income was very negative in 2016-17. (Will the system even let me enter a negative amount into my SA return?) And I don't want to have to report a huge amount of income from AC in 2017/18. I might even find I end up in a higher tax rate bracket for 2017/18 than in 2016/17, so that the extra tax due on the recovery in 2017/18 is greater than the tax saved on the loss reported in 2016/17. (Which, I suppose, is the same situation the wife above is in.) So I'm not intending to report the Leeds loss when I submit my SA return for 2016/17. And when I submit my 2017/18 return, I won't report the Leeds recovery. (Though I will, of course, report the Leeds interest received at the time of the recovery.) I may do the same for Loan #199. (It was shown as a loss in Nov.'16 and then partially recovered later that month, with the remaining recovery in Jun.'17.) Do others here think this is a reasonable approach to take? Or am I asking for trouble by not using AC's numbers exactly as they appear on the tax statements?
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IFISAcava
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Post by IFISAcava on Sept 28, 2017 22:24:33 GMT
Do others here think this is a reasonable approach to take? Or am I asking for trouble by not using AC's numbers exactly as they appear on the tax statements? I am not an expert, but I cant see that you have to declare a capital loss if you reasonably think you might get it at some point. It's when you deem it an unrecoverable loss you claim it, and if it is then unexpectedly recovered you declare it back. So I'd be comfortable taking the approach you're taking: you're simply paying tax on interest received, very starightforward. Having said that, I probably wouldn't do it, primarily because I prefer to take all the tax breaks available when they are available in case they are removed in future!
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duck
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Post by duck on Sept 29, 2017 6:10:38 GMT
Do others here think this is a reasonable approach to take? Or am I asking for trouble by not using AC's numbers exactly as they appear on the tax statements? I am not an expert, but I cant see that you have to declare a capital loss if you reasonably think you might get it at some point. ... (please read this post knowing that I am not a tax specialist/accountant or similar, rather a retired Consultant Nuclear Engineer with a love of spreadsheets and all things 'figures') You don't have to declare losses unless you want to, I've had several discussions with my accountants on this matter. The 'problem' that you run into is that where your figures do not agree with those that a platform submits there is a potential for a 'red flag' to be raised at HMRC and an investigation being launched. This is not a pleasant experience so you should always have this in mind if you decide to vary from the platforms declared position. That said I have varied from platform figures this in both 14/15 and 15/16 tax years. This 'deviation' involved both 'self deeming to be irrecoverable' (SAIM1220 et al) and not claiming losses where I was confident that recovery would be made. Whilst it is attractive to claim for all 'losses' my personal opinion is that you should always consider the implications of recovery in the following Tax Year. For instance will £x of capital being returned (now treated as 'income') move you up a tax band or just mean a higher tax bill??? Like many others here I invest on behalf of my wife and I try to ensure that whilst her allowance is utilised (P2P only income) but also that she is not presented with a tax bill. This has become even more of a juggling act with the ability to claim for losses. Manageable but time consuming. If you decide to vary from platform figures the key is to keep very good records just in case that unwanted letter arrives from HMRC. I continually maintain a spreadsheet that includes all my/my wife's defaults this references my and my wife's income and tax positions so that I can make adjustments as necessary. As recoveries are made these are added. Where I have varied from a platform's position I have archived screen dumps of the loan position at the time that I prepared my tax figures. This includes both figures and all the updates on the loan (AC's are the most informative by a long way) and anything else available to substantiate my position ..... and I preserve my notes to show my line of thinking and the reason for claiming/not claiming. Maintaining a full paper trail will come in very useful if HMRC decide to investigate.
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Post by crabbyoldgit on Sept 29, 2017 6:46:32 GMT
For those fortunate to having an income of just under £50000, but unfortunate enough to have dependant children the recovery of capital from a default claimed the previous year could be very expensive indeed.Loosing 1% of their child benifit for every £100 returned.
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Post by peerlessperil on Sept 29, 2017 8:08:08 GMT
For those fortunate to having an income of just under £50000, but unfortunate enough to have dependant children the recovery of capital from a default claimed the previous year could be very expensive indeed.Loosing 1% of their child benifit for every £100 returned. Child benefit is assessed using your net adjusted income. You can easily lower this to below £50k by making a donation to charity or making a contribution to your pension. You can even make a donation to charity after the end of the tax year and have it allocated to the previous year when you submit your tax return. (N.B. You need to have paid sufficient tax in the year to cover the gift aid relief, and for pensions you are limited to relief on a max contribution of £3,600 if you have no "earned income").
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