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Post by easteregg on Dec 4, 2014 12:33:01 GMT
Lenders will be pleased to read that the Autumn Statement contained a section on peer-to-peer lending which is to be taxed after bad debt, rather than before. Income tax will also be deducted at source, so lenders won't need to fill in a tax return solely for peer-to-peer lending.
blog.p2pmoney.co.uk/autumn-statement-p2p-lending
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Post by yorkshireman on Dec 4, 2014 13:00:09 GMT
Income tax will also be deducted at source, so lenders won't need to fill in a tax return solely for peer-to-peer lending.
But can we be sure that the “circular” platform will get it right when they can’t even launch loans with correct information?
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ianj
Member of DD Central
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Post by ianj on Dec 4, 2014 14:12:21 GMT
Lenders will be pleased to read that the Autumn Statement contained a section on peer-to-peer lending which is to be taxed after bad debt, rather than before. Income tax will also be deducted at source, so lenders won't need to fill in a tax return solely for peer-to-peer lending.
blog.p2pmoney.co.uk/autumn-statement-p2p-lending
Certainly good news as far as bad debt is concerned, but I'm not so sure that I'm pleased to hear P2P interest will be deducted at source. Who benefits financially from this change? Not lenders, I'll wager. I'm sure that there are tax savvy members who will correct me if my reasoning is incorrect. As I see it.... Any tax liability for interest received in April 16 will become payable in Jan & Jul 18.
If the tax liability is reinvested until payment is due (21/28 months onward)
a) lenders interest increases overall.
b) HMRC has quicker access to potentially less revenue.
It would be interesting if someone could calculate how much worse-off per year a lender (basic and higher rate) might be per £1000 lent if (keeping figures simple, as per Saving Stream, 1%/m, paid monthly) all tax liabilities were reinvested. Looking at things from a different perspective, how much loss of interest is it worth not to have to complete a self-assessment return?
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shimself
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Post by shimself on Dec 4, 2014 16:56:04 GMT
<abbr>It's a pain about tax deducted at source for some of us (living overseas for example)</abbr>
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surby
Minor shareholder in Assetz Capital
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Post by surby on Dec 4, 2014 18:33:04 GMT
<abbr>It's a pain about tax deducted at source for some of us (living overseas for example)</abbr> I note the Government plans to consult with a view to introducing the change in April 2017. I will be responding to that consultation to suggest they allow exemption for people who can currently complete the R85 form.
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Post by 4thway on Dec 4, 2014 19:47:00 GMT
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Post by easteregg on Dec 5, 2014 12:27:33 GMT
<abbr>It's a pain about tax deducted at source for some of us (living overseas for example)</abbr> I note the Government plans to consult with a view to introducing the change in April 2017. I will be responding to that consultation to suggest they allow exemption for people who can currently complete the R85 form. I would guess that there are some lenders who simply either don't know they need to do a tax return or simply forget. I would certainly hope that those lenders who are fortunate enough to be exempt to be able to register an R85 form to continue to receive tax free returns.
Having tax deducted at source will make it easier for the "retail" lender but I quite understand that some lenders will be worse off as they can't use this money to relend - effectively earning interest on money they owe to the tax man.
I also note that there was no mention of lending fees, which I believe will be required to be paid after tax, unlike today when they are paid before tax.
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Vero
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Post by Vero on Dec 5, 2014 15:44:29 GMT
If losses will soon be deductible, then I wonder if a loss will trigger a tax refund at source?
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agent69
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Post by agent69 on Dec 5, 2014 22:21:31 GMT
If losses will soon be deductible, then I wonder if a loss will trigger a tax refund at source? At what point in time does the loss occur? If it's the end of the legal process to wrap up the defaulting company, you might have to wait years.
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stokeloans
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Post by stokeloans on Dec 6, 2014 10:42:04 GMT
For someone like me,self employed,who's income can vary wildly from year to year,who currently is below the tax threshold entirely,if they tax at source I'm going to be a loser aren't I ? If not a loser it's going to seriously complicate my tax calculations....I don't employ an accountant.
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