Limited company for p2p investment

A few thousand quids??!! They're having you on.

I draw £6-8k salary to accrue State Pension credit without incurring NI, plus £5k divs and keep the rest within the company. Make sure you reserve to the maximum extent justifiable for expected bad debts.

thanks. will take into consideration of bad debts. 

do you mean an 11k annual earning from p2p before tax?

I'd have to agree that there aren't many substantial advantages to lending via a company, and it would be hard to justify adding a lot of cost and admin hassle if you don't already have one.

One scenario where it could make sense is if you were paying large amounts of Higher Rate tax now on P2P income but expect to be a Basic Rate (or nil rate) taxpayer a few years down the line.

Now that dividend tax credits have been abolished, it can easily cost more to invest via a company than it does to invest as an individual. 

The main tax benefits for a company are:

• A company provides an opportunity to defer income to later years
• A higher rate tax payer benefits from having the first £5,000 of dividends taxed at only 19% corporation tax.  But that allowance is being reduced to £2,000 from next year.
• More generous criteria for offsetting expenses against the income.
  
• If you have a trading company, you might eventually be able to extract some of the remaining profit as entrepreneurs releif.  But I don't think a company that earned its main income from P2P investments would qualify as a trading company.
  

After making maximum use of these benefits, the tax downside is that any income that you need to take from the company as dividends is now subject to double taxation.  You pay 19% corporation tax as well as paying tax on the dividend at your marginal tax rate at the time you take the dividend.

As everyone says it depends. Although the divi allowance is dropping you could make several family members shareholders (perhaps) distributing your wealth efficiently.

Depending in the time it takes to admin the company you could also employ family member to do this and use up any of their remaining tax-free allowance.

There are some other benefits - 'trivial gifts', annual parties, other small stuff, that may or may not apply/appeal in your case.

I am unsure what special rules surround companies primarily set up as investment vehicles. If you are were planning to non-res for long enough (its no longer only a full year) that might be an escape?

*Edit: One thing you might (not) care about is the added complexity of winding up where there is almost certainly going to be a hangover from distressed loans. I don't know enough about this to know how much of a headache it is(n't).

See here