sl75
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Post by sl75 on Apr 10, 2019 17:18:52 GMT
I notice that Welleley's tax statement for P2P lending does not currently include any mention of the losses or of loans in recoveries...
The possibility of losses seems to have been an innovation for April 2018, so previous tax statements were ok as they didn't need to mention losses and recoveries.
I guess that I can use either "Total Realised Loss" or the sum of "Total Realised Loss" and "Total Suspended Balance", as long as I'm consistent in handling the recoveries or further realised losses in 2019/20, but I don't see that I should have to document this independently of the tax statement, when all other P2P platforms I'm aware of where losses are possible provide these figures on the same document.
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ferdy
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Post by ferdy on Apr 13, 2019 9:56:05 GMT
I notice that Welleley's tax statement for P2P lending does not currently include any mention of the losses or of loans in recoveries...
The possibility of losses seems to have been an innovation for April 2018, so previous tax statements were ok as they didn't need to mention losses and recoveries.
I guess that I can use either "Total Realised Loss" or the sum of "Total Realised Loss" and "Total Suspended Balance", as long as I'm consistent in handling the recoveries or further realised losses in 2019/20, but I don't see that I should have to document this independently of the tax statement, when all other P2P platforms I'm aware of where losses are possible provide these figures on the same document.
I agree. Have you asked Wellesley the reason for this ? I have just submitted an email to them.
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sl75
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Post by sl75 on Apr 15, 2019 11:23:45 GMT
I agree. Have you asked Wellesley the reason for this ? I have just submitted an email to them. I didn't ask them for reasons, I just asked them to correct it on the website... but not heard anything back yet.
The reason seems clear to me - when making the decision to expose individual investors to losses, they forgot to update the statement that has been working fine for the last few years, and which was designed at a time when investors were not expected to be directly exposed to such losses in normal operating conditions.
If it's too much hassle for them to update the tax statement to include capital losses, I'd be glad to let them pay me the money instead, as was expected at time of investment...
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Post by penguin on Apr 15, 2019 13:20:23 GMT
Just been through the same process, and have included the realised write-offs for the period that are included in one of my strange subsidiary statements on the website. All part and parcel of the Wellesley experience, I suppose
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ferdy
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Post by ferdy on Apr 18, 2019 7:25:57 GMT
Here is my reply from Wellesley
'Our definition of realised losses within your legacy P2P product are a possible combination of loss income and capital in line with the expected product terms. Due to the complexity of HMRC rules we are unable to provide definitive information that the losses you have suffered can be offset against other profits, as such they have not been included in the tax statement.'
Do they understand the HMRC rules ?
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tarq
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Post by tarq on Apr 19, 2019 12:40:50 GMT
They seem very vague with their replies.
I emailed about the 'losses' attached to my investment as the figures didn't add up, but only got a vague reply, which was no help!
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sl75
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Post by sl75 on Apr 23, 2019 16:16:11 GMT
No reply from my enquiry yet (and I don't have a copy as I submitted it directly via their website).
I get the impression that any complexity is not in HMRC's rules, but in how Wellesley structured their product...
However, they seem to know exactly what amount of each of the loans I'm exposed to, in order to be able to suspend the relevant amount and adjust my invested balances, as well as paying the relevant portion of recoveries to me, so adding up those same numbers to produce the necessary lines on a "tax statement" hardly seems rocket science.
Anyone got enough invested to bother with a formal complaint and escalation to FCA / FOS? (for the 2-figure sum [4 if you count pence!] in my "total realised losses", it's really not worth the hassle - I might follow-up with a further email or two, but if it's not resolved by the time I've got the rest of the figures for my tax return, I'll just screenshot a few things with the relevant figures for my records, to make sure I follow an equivalent procedure for 2019/20, and it'll be largely lost in the noise w.r.t. other P2P income, all of which goes in a single box on the tax return).
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ferdy
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Post by ferdy on Apr 25, 2019 10:05:15 GMT
No reply from my enquiry yet (and I don't have a copy as I submitted it directly via their website).
I get the impression that any complexity is not in HMRC's rules, but in how Wellesley structured their product...
However, they seem to know exactly what amount of each of the loans I'm exposed to, in order to be able to suspend the relevant amount and adjust my invested balances, as well as paying the relevant portion of recoveries to me, so adding up those same numbers to produce the necessary lines on a "tax statement" hardly seems rocket science.
Anyone got enough invested to bother with a formal complaint and escalation to FCA / FOS? (for the 2-figure sum [4 if you count pence!] in my "total realised losses", it's really not worth the hassle - I might follow-up with a further email or two, but if it's not resolved by the time I've got the rest of the figures for my tax return, I'll just screenshot a few things with the relevant figures for my records, to make sure I follow an equivalent procedure for 2019/20, and it'll be largely lost in the noise w.r.t. other P2P income, all of which goes in a single box on the tax return).
In reply to my further question to Wellesley of when they would be including losses on the tax statement, their reply stated 'At this stage we have no plans to include losses on the annual statement' Which would suggest that perhaps they never will include them, so we may well have to do as you suggest.
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Greenwood2
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Post by Greenwood2 on Apr 26, 2019 6:34:09 GMT
Here is my reply from Wellesley 'Our definition of realised losses within your legacy P2P product are a possible combination of loss income and capital in line with the expected product terms. Due to the complexity of HMRC rules we are unable to provide definitive information that the losses you have suffered can be offset against other profits, as such they have not been included in the tax statement.' Do they understand the HMRC rules ? Are they saying the realised losses figure may include loss of expected interest? I guess that would complicate things.
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2boi
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Post by 2boi on May 3, 2019 12:50:36 GMT
...
Anyone got enough invested to bother with a formal complaint and escalation to FCA / FOS? (for the 2-figure sum [4 if you count pence!] in my "total realised losses", it's really not worth the hassle - I might follow-up with a further email or two, but if it's not resolved by the time I've got the rest of the figures for my tax return, I'll just screenshot a few things with the relevant figures for my records, to make sure I follow an equivalent procedure for 2019/20, and it'll be largely lost in the noise w.r.t. other P2P income, all of which goes in a single box on the tax return).
I have a tiny amount with them which I only took out because they had a good cashback offer. Also (on their current predictions) I will not make a loss, I will get the equivalent of my original sum plus 2.12% pa back after 5 years, next year. But this is instead of the promised capital + 6.85% pa. However they have been so devious and ill-mannered throughout that I was tempted to make a FOS complaint. I encourage anyone else to do so, have a look at my posts to see what stunts Wellesley have been up to, including retropspectively changing their loan stats: p2pindependentforum.com/thread/14486/wellesley-loan-performance-finally-updated?page=1&scrollTo=318984Also their contingency fund is a complete scam (IMHO). I don't believe it exists, has anyone ever had anything from it? They did not follow their own procedures in deciding not to use the fund - the decision to use it is meant to be made on request from the lender but they just unilaterally decided not to, for everyone.
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sl75
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Post by sl75 on May 7, 2019 14:45:48 GMT
Also their contingency fund is a complete scam (IMHO). I don't believe it exists, has anyone ever had anything from it? They did not follow their own procedures in deciding not to use the fund - the decision to use it is meant to be made on request from the lender but they just unilaterally decided not to, for everyone. My understanding is that this operated in a similar manner to most other P2P provision funds - although legally claims are made "by the lender", the platform makes those claims acting as the lender's agent.
Practically, when it was operating, I would expect it to be mostly "invisible" to lenders unless you're paying very close attention - the relevant loans would disappear from the loan book, and the proportion of "matched funds" would go down as unmatched cash replaced the relevant loan in each lender's holdings, similar to what would happen when a loan was repaid by the borrower.
A page that was linked in one of the email notifications about losses gives some more performance statistics:
In particular this shows over £27M of losses since 2014, and claims that "78% of the total losses have been covered by Wellesley on a discretionary basis.". If taken at face value that would seem to imply about £21M covered by a contingency fund and/or Wellesley directly, and only £6M of losses actually passed on to investors.
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2boi
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Post by 2boi on May 10, 2019 0:47:51 GMT
...A page that was linked in one of the email notifications about losses gives some more performance statistics:
In particular this shows over £27M of losses since 2014, and claims that "78% of the total losses have been covered by Wellesley on a discretionary basis.". If taken at face value that would seem to imply about £21M covered by a contingency fund and/or Wellesley directly, and only £6M of losses actually passed on to investors.
Yes interesting to compare that £27M loss figure they are admitting now, to the the mere £7.9M they were claiming as recently as January this year: web.archive.org/web/20190118060905/https://www.wellesley.co.uk/about-wellesley/loan-performance/ I don't know how they can get away with that. Surely anyone who invested up until March this year (when the 2014, 2015 and 2016 £27M loss was finally admitted) has been misled?
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sl75
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Post by sl75 on May 10, 2019 7:16:52 GMT
Yes interesting to compare that £27M loss figure they are admitting now, to the the mere £7.9M they were claiming as recently as January this year: web.archive.org/web/20190118060905/https://www.wellesley.co.uk/about-wellesley/loan-performance/ I don't know how they can get away with that. Surely anyone who invested up until March this year (when the 2014, 2015 and 2016 £27M loss was finally admitted) has been misled? When I follow your link, I don't seem to be looking at the same page as you, as it shows "capital loss" column totalling £8.45m and "interest loss" £4.73m (for a total of just over £13M)
Comparing stats on the two pages 3 more loans from the 2015 cohort and one from the 2016 cohort were added to the losses, which tallies quite well with the March announcements.
From your linked page there's also a javascript linked marked "To read more click here." which opens a pop-up stating "Total provisions made to date £13.18 million", "Total provisions covered by Wellesley Finance £10.8 million" and "Figures correct as at 26.04.2018.". I don't see anything even remotely tallying with the £7.9M figure you mention.
I get the impression that the previously-stated policy of investing in their own loan book and taking the first hit on any losses has in fact been occurring and has bitten them quite hard, as correlating that with other presumed £21M figure from my previous post seems to suggest that Wellesley themselves took a further £10M hit from the further £14M of losses; if so, they've definitely got a very strong incentive to maximise the possibility of making a full recovery if at all possible on any of these!
The question of exactly which losses were covered in all or in part by Wellesley, and which were passed on to investors seems about as clear as mud, which is why I expect a clear statement showing total losses for tax purposes from the platform, just as other P2P platforms provide each year. If some investors (or their accountants) were to want to ignore that figure and dig down into other figures based on their interpretation of the rules, that is of course up to them, but I'm going for the simple option of "report whatever figures the platform(s) provide", and Wellesley is alone in not having provided any (as mentioned before, if they don't provide a definitive figure to use, I'll use a screenshot of what seems the most relevant figure, and ensure I do 2019/20 tax return on the same basis, but I'd prefer the simple option).
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raokin
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Post by raokin on May 15, 2019 3:18:54 GMT
I couldn't help noticing that Wellesley's announcement regarding the suspension of the provision fund was made on Apr 24th 2018 just a few days before they announced that 3 x P2P loans had gone bad. Co-incidence? I don't think so. I have been pursuing the subject of these loans with Wellesley for the last year. They have steadfastly refused to provide any detailed information. I certainly haven't had the BADGER email. I am now horrified to hear that they haven't included the recent round of capital write offs on these loans on the annual tax statements. I'm a retired Certified Accountant and I have no intention of letting go of this. They are required by HMRC to disclose these write offs in their company tax returns. They are required by law to provide sufficient information for borrowers to offset the capital loan write offs against interest received. I don't personally believe that this has anything to do with the structure of their product or that the capital write off has an interest content. I am now in the process of making a formal complaint to the Financial Ombudsman and I am also going to make a complaint to HMRC. I am of the belief that these loans were completely fictitious and this entire episode is tantamount to fraud. I have notified Wellesley of the complaints and my beliefs. During the last six months I have received several communications from Wellesley that are highly misleading. They have admitted this and stated that this was a simple mistake on their part.
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ferdy
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Post by ferdy on Jun 16, 2019 15:11:19 GMT
I notice that Welleley's tax statement for P2P lending does not currently include any mention of the losses or of loans in recoveries...
The possibility of losses seems to have been an innovation for April 2018, so previous tax statements were ok as they didn't need to mention losses and recoveries.
I guess that I can use either "Total Realised Loss" or the sum of "Total Realised Loss" and "Total Suspended Balance", as long as I'm consistent in handling the recoveries or further realised losses in 2019/20, but I don't see that I should have to document this independently of the tax statement, when all other P2P platforms I'm aware of where losses are possible provide these figures on the same document.
Hi again Just wondered what you ended up using, Total Realised Loss or something else. I am just preparing my tax return and am not sure how I should account for the Wellesley losses. I guess TLR would be easiest to keep track of.
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