Odd P2P related tax question

registerme Member of DD Central Posts: 6,212 Likes: 6,021	Odd P2P related tax question Nov 10, 2022 10:47:11 GMT Quote Select Post Deselect Post Link to Post Back to Top Post by registerme on Nov 10, 2022 10:47:11 GMT Thanks to both winding down my book, and loan write-offs, if I net my P2P income for the 2021-2022 tax year it totals to minus thousands. Do you report negative income? Or zero it?
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cb25

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Odd P2P related tax question Nov 10, 2022 11:21:04 GMT registerme likes this

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Post by cb25 on Nov 10, 2022 11:21:04 GMT

I went from www.gov.uk/guidance/peer-to-peer-lending to www.gov.uk/government/publications/income-tax-relief-for-irrecoverable-peer-to-peer-loans-final-guidance , then to PDF assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/597959/Income_tax_relief_for_irrecoverable_peer_to_peer_loans_FINAL_GUIDANCE__2_.pdf ("Income tax relief for irrecoverable peer to peer loans

Final Guidance")

Page 19 of that PDF has an example:

"2015/16 year: In this year Tony S’s income is £10 in interest from Zapo loans, and £3 from the Sateretter loan which has not become irrecoverable. One loan of £30 has become irrecoverable as the creditor has entered into financial difficulties. He can set this £30 off first against the interest received from the other Sateretter loan (£30-£3 = £27). He can then set the remainder of it off against other P2P interest received in the same year from loans made through Zapo (£27-£10 = £17). The remaining £17 can be carried forward."

As always, please don't consider this advice, but I view the fact that the remaining £17 of losses can be carried forward as suggesting you could enter a negative amount (EDIT: See post by ilmoro below). If you're out of P2P for good (unlike in the example - not shown here - where it's used to offset gains in subsequent years), not sure what advantage that would have over entering £0.

Last Edit: Nov 10, 2022 13:59:19 GMT by cb25

registerme Member of DD Central Posts: 6,212 Likes: 6,021	Odd P2P related tax question Nov 10, 2022 11:23:57 GMT cb25 likes this Quote Select Post Deselect Post Link to Post Back to Top Post by registerme on Nov 10, 2022 11:23:57 GMT cb25 thank you, that was very helpful. RM
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ilmoro
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Odd P2P related tax question Nov 10, 2022 12:40:57 GMT registerme, mrk, and 1 more like this

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Post by ilmoro on Nov 10, 2022 12:40:57 GMT

AIUI You zero it.

www.gov.uk/guidance/peer-to-peer-lending#how-to-claim-tax-relief-in-a-tax-return

"Any excess relief for peer to peer bad debts available to carry forward does not need to be included on the tax return, but the lender should keep records of any carry forward relief in order to make a correct and complete claim in a tax return for a future period."

I usually stick an explanation in the notes

Last Edit: Nov 10, 2022 12:44:32 GMT by ilmoro

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IFISAcava
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Odd P2P related tax question Nov 10, 2022 15:19:41 GMT

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Post by IFISAcava on Nov 10, 2022 15:19:41 GMT

Nov 10, 2022 12:40:57 GMT ilmoro said:

AIUI You zero it.

www.gov.uk/guidance/peer-to-peer-lending#how-to-claim-tax-relief-in-a-tax-return

"Any excess relief for peer to peer bad debts available to carry forward does not need to be included on the tax return, but the lender should keep records of any carry forward relief in order to make a correct and complete claim in a tax return for a future period."

I usually stick an explanation in the notes

so do I - just clear and transparent (and helps the continuity).

keitha Member of DD Central 2024, hopefully the year I get out of P2P Posts: 3,875 Likes: 2,314	Odd P2P related tax question Nov 10, 2022 19:32:56 GMT Quote Select Post Deselect Post Link to Post Back to Top Post by keitha on Nov 10, 2022 19:32:56 GMT So you zero it which then means :- This year £-1000 but you put in zero and carry the £-1000 forward Next year loan A repays £100 of a defaulted loan, Again you zero it but now carry £-900 forward ,,,

Post by registerme on Nov 10, 2022 10:47:11 GMT

Post by cb25 on Nov 10, 2022 11:21:04 GMT

Post by registerme on Nov 10, 2022 11:23:57 GMT

Post by ilmoro on Nov 10, 2022 12:40:57 GMT

Post by Deleted on Nov 10, 2022 12:44:03 GMT

Post by IFISAcava on Nov 10, 2022 15:19:41 GMT

Post by keitha on Nov 10, 2022 19:32:56 GMT