ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
Posts: 10,905 
Likes: 11,127
|
Post by ilmoro on Mar 18, 2015 22:16:18 GMT
RateSetter have already changed the reporting of income and fees, where there are now no fees (this was nearly a year ago). Before there were in reality no "net fees", as RateStter used to boost the income and then reduce it with fees. End result the same. A pointless exercise and I was so glad when it was simplified. It does mean more recent loans are easy, just straight interest. I'm unsure how the older loans will be treated, do you pay tax on the gross or the net. Personally I paid tax on the self declared on the net position and its never been challenged... This was after all my true income from P2P. Kevin. Thanks, I'm a historical (no pun intended despite user name) rather than current lender so I hadn't noticed that fees were no longer being charged. I've also declared net income (with supporting statements) & yet to be challenged.
|
|
james
Posts: 2,205
Likes: 955
|
Post by james on Mar 19, 2015 3:32:34 GMT
Just picked up on this(from pikestaff 's post) - draft legislation on bad debt relief will be published this year and (if enacted) will have effect for loans made after April 2015.
Does that mean that loans made in 2014 (e.g. Plumber) will not be eligible when the losses eventually become quantified?
With the Budget 2015 document saying one thing, " a new relief to allow individuals lending through P2P to offset any losses from loans which go
bad against other P2P income. It will be effective from April 2016" and the HMRC Overview of Tax Legislation and Rates saying another I don't think it is currently clear which way it'll go. My guess is that it will be for loans made from 6 April 2015 only. If so it might prove frustrating for anyone who believed the initail announcement and started lending on higher risk loans based on the expectation that their defaults after april would be deductible.
|
|
pikestaff
Member of DD Central
Posts: 2,140
Likes: 1,486
|
Post by pikestaff on Mar 19, 2015 7:34:24 GMT
RateSetter have already changed the reporting of income and fees, where there are now no fees (this was nearly a year ago). Before there were in reality no "net fees", as RateStter used to boost the income and then reduce it with fees. End result the same. A pointless exercise and I was so glad when it was simplified. It does mean more recent loans are easy, just straight interest. I'm unsure how the older loans will be treated, do you pay tax on the gross or the net. Personally I paid tax on the self declared on the net position and its never been challenged... This was after all my true income from P2P. Kevin. , it's the old loans that are the issue. Assuming that the HMRC ruling (which I've not seen) applies to all platforms and not just to zopa, RS needs to move its old loans onto the new terms by 6 April, otherwise lenders who self-declare based on the net position will be breaking the law.
|
|
pikestaff
Member of DD Central
Posts: 2,140
Likes: 1,486
|
Post by pikestaff on Mar 19, 2015 7:59:47 GMT
Just picked up on this(from pikestaff 's post) - draft legislation on bad debt relief will be published this year and (if enacted) will have effect for loans made after April 2015.
Does that mean that loans made in 2014 (e.g. Plumber) will not be eligible when the losses eventually become quantified?
With the Budget 2015 document saying one thing, " a new relief to allow individuals lending through P2P to offset any losses from loans which go
bad against other P2P income. It will be effective from April 2016" and the HMRC Overview of Tax Legislation and Rates saying another I don't think it is currently clear which way it'll go. My guess is that it will be for loans made from 6 April 2015 only. If so it might prove frustrating for anyone who believed the initail announcement and started lending on higher risk loans based on the expectation that their defaults after april would be deductible. When it comes to detail I'd always trust the HMRC overview over the budget statement. Besides, this is old news. HMRC published it back in December - see para 1.15 here www.gov.uk/government/uploads/system/uploads/attachment_data/file/385370/OLD_complete_v3.pdf. Somewhere on the forum there is a post about it. Unless there is a change of heart, loans made before 6/4/15 will not qualify - and yes, that includes the plumber. But the cutoff date does raise an interesting question about SM "purchases" on FC (and any other platform that structures SM transactions the same way). See the tax FAQ on FC here support.fundingcircle.com/entries/22557912-What-are-the-tax-consequences-of-lending-as-an-individual- especially the third bullet under "Taxation of sales of loan parts for a premium or discount". Because SM "purchases" on FC are technically new loans, it would appear that purchases on or after 6/4/15 should qualify for the relief. However, my personal view is that this structuring is a bit too clever by half, and might not withstand a challenge by HMRC.
|
|
|
|
Post by westonkevRS on Mar 19, 2015 18:18:00 GMT
RateSetter have already changed the reporting of income and fees, where there are now no fees (this was nearly a year ago). Before there were in reality no "net fees", as RateStter used to boost the income and then reduce it with fees. End result the same. A pointless exercise and I was so glad when it was simplified. Personally I paid tax on the self declared on the net position and its never been challenged... This was after all my true income from P2P. Kevin. , it's the old loans that are the issue. Assuming that the HMRC ruling (which I've not seen) applies to all platforms and not just to zopa, RS needs to move its old loans onto the new terms by 6 April, otherwise lenders who self-declare based on the net position will be breaking the law. The reporting of income by myself as net seems to be the common method of lenders. This was also the correct treatment based on RateSetter's understanding from a tax specialist at the time (together with Zopa, I understand). The current/new gross vs net treatment on fees is being discussed as we speak, and as soon as this is clarified I'm sure each P2P lender will communicate, and I'll certainly post here. In the meantime I can't discuss the topic anymore, whilst the discussions are underway. Personally, I'll be reporting net for the tax year 2014/2015 as I've always done. Kevin.
|
|
