JamesFrance
Member of DD Central
Port Grimaud 1974
Posts: 1,323 
Likes: 897
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Post by JamesFrance on Dec 12, 2014 12:18:56 GMT
The borrower is deducting 20% tax from the interest payments, so this loan is not helpful for non UK residents, as it becomes too complicated to declare it separately from all other P2P loans. I do hope this will not become a habit.
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agent69
Member of DD Central
Posts: 6,044
Likes: 4,437
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Post by agent69 on Dec 12, 2014 12:27:23 GMT
The borrower is deducting 20% tax from the interest payments, so this loan is not helpful for non UK residents, as it becomes too complicated to declare it separately from all other P2P loans. I do hope this will not become a habit. I've been supportive of AC in recent weeks and I don't hold any of this loan. But, you would think that if the borrower had the option to deduct tax, somebody would have checked and told everyone it was a possibility (or was it made clear and just didn't see it?)
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Post by jevans4949 on Dec 12, 2014 12:31:30 GMT
Regarding the tax deduction, will Assetz be amending the year-end tax certificate for next April to separate taxed and untaxed interest received?
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agent69
Member of DD Central
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Post by agent69 on Dec 12, 2014 12:40:41 GMT
Regarding the tax deduction, will Assetz be amending the year-end tax certificate for next April to separate taxed and untaxed interest received? If the borrower is deducting the tax, should the borrower not be issuing the certificate confirming how much of each individuals interest has been retained?
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jhma
Member of DD Central
Posts: 82
Likes: 53
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Post by jhma on Dec 12, 2014 12:43:56 GMT
I have just received an email regarding this tax issue. As a company, it seems I will continue (correctly) to receive interest gross. But if I were a private investor I would right now be looking for clarification and further justification for this, as it is to my knowledge a 'first' amongst all peer to business loans!
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Post by chris on Dec 12, 2014 12:49:53 GMT
Regarding the tax deduction, will Assetz be amending the year-end tax certificate for next April to separate taxed and untaxed interest received? If the borrower is deducting the tax, should the borrower not be issuing the certificate confirming how much of each individuals interest has been retained? The site, after an update this afternoon, will be doing the tracking so the tax statement will be amended with a new line showing the amount of tax deducted within that time period.
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oldgrumpy
Member of DD Central
Posts: 5,087
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Post by oldgrumpy on Dec 12, 2014 12:55:19 GMT
Since when were borrowers given the authority by HMRC to retain 20% of anyone's interest?
ed: Cross posted with Chris's note.
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Post by chris on Dec 12, 2014 12:57:26 GMT
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oldgrumpy
Member of DD Central
Posts: 5,087
Likes: 3,233
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Post by oldgrumpy on Dec 12, 2014 13:00:50 GMT
Ta! Wow!
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Post by batchoy on Dec 12, 2014 13:01:13 GMT
I have just received an email regarding this tax issue. As a company, it seems I will continue (correctly) to receive interest gross. But if I were a private investor I would right now be looking for clarification and further justification for this, as it is to my knowledge a 'first' amongst all peer to business loans! I interpret the email in the way you do but I don't see how it is going to be achieved unless AC are supplying the borrower with a breakdown of what proportion of the loan has been held for what periods by companies and thus what proportion of the monthly repayment can't be withheld by way of tax.
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Post by chris on Dec 12, 2014 13:03:03 GMT
I have just received an email regarding this tax issue. As a company, it seems I will continue (correctly) to receive interest gross. But if I were a private investor I would right now be looking for clarification and further justification for this, as it is to my knowledge a 'first' amongst all peer to business loans! I interpret the email in the way you do but I don't see how it is going to be achieved unless AC are supplying the borrower with a breakdown of what proportion of the loan has been held for what periods by companies and thus what proportion of the monthly repayment can't be withheld by way of tax. That's what I'm working on now
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Post by jevans4949 on Dec 12, 2014 13:10:35 GMT
The site, after an update this afternoon, will be doing the tracking so the tax statement will be amended with a new line showing the amount of tax deducted within that time period. Thanks chris. I think another platform (can't remember which) said at one point they would be deducting tax before crediting investors. HMRC rules are clear that the business paying interest should deduct tax at source, but in the case of P2P they probably don't have access to the investors' details, so I believe most P2P companies got waivers for this from HMRC. I can't imagine that HMRC is that keen to process hundreds of interest statements for a few pence each.
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Post by chris on Dec 12, 2014 13:14:01 GMT
The site, after an update this afternoon, will be doing the tracking so the tax statement will be amended with a new line showing the amount of tax deducted within that time period. Thanks chris. I think another platform (can't remember which) said at one point they would be deducting tax before crediting investors. HMRC rules are clear that the business paying interest should deduct tax at source, but in the case of P2P they probably don't have access to the investors' details, so I believe most P2P companies got waivers for this from HMRC. I can't imagine that HMRC is that keen to process hundreds of interest statements for a few pence each. HMRC have not given any waivers as far as we know and all P2B sites are faced with this issue, indeed the chancellor mentioned it in his recent statement. I have no idea if this affects P2C.
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Post by jevans4949 on Dec 12, 2014 13:35:04 GMT
the HMRC have not given any waivers as far as we know and all P2B sites are faced with this issue, indeed the chancellor mentioned it in his recent statement. I have no idea if this affects P2C. I guess the people at HMRC who write the rules haven't figured out how P2P works yet. I can see that the HMRC policy might prevent tax evasion in the case of large loans from individuals, but given that on some platforms the micro-loans are commonly as little £10, and monthly interest a matter of pence, there clearly ought to be a waiver for P2P. Now P2P platforms have to register with the FCA, they can be clearly defined in the rules. Do HMRC really want to deal with all that micro-data. Maybe we all ought to write to our MPs? What would you like us to say? |
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unmadem
Member of DD Central
Posts: 377
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Post by unmadem on Dec 12, 2014 13:42:26 GMT
The borrower is deducting 20% tax from the interest payments, so this loan is not helpful for non UK residents, as it becomes too complicated to declare it separately from all other P2P loans. I do hope this will not become a habit. Wow that is a major disincentive for investment esp if your income is below tax threshold and/or you don't fill in a self assessment tax return. At least with bank interest you can register for gross interest. I really hope this does not catch on.
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