sand2880
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Fees
Mar 27, 2015 5:41:02 GMT
Post by sand2880 on Mar 27, 2015 5:41:02 GMT
With the confirmation that fees will be taxable from the next tax year, has an announcement been made if there will be changes to the fees structure for lenders?
Or is it a case of taking a hit for one year until the £1,000 allowance is introduced, depending on the election outcome of course?
With returns at low levels, I'm struggling to get funds invested at reasonable rates after accounting for paying tax on fees.
Anyone heard anything that I've missed?
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blender
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Fees
Mar 27, 2015 9:08:44 GMT
Post by blender on Mar 27, 2015 9:08:44 GMT
No but I seem to have missed something you have heard. Do you mean that that there is some official statement that income tax is chargeable on gross interest rather than net interest from April? Would you point us to it please?
(BTW I am not making a statement of the current position - just asking about the future)
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Fees
Mar 27, 2015 10:03:13 GMT
Post by davee39 on Mar 27, 2015 10:03:13 GMT
This has been raised on the Zopa forum. Zopa have been advised by HMRC that lender fees are not tax deductible. They have changed their system so fees are not charged explicitly (similar to ratesetter) which leaves earnings unchanged.
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mikeb
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Fees
Mar 27, 2015 10:06:05 GMT
Post by mikeb on Mar 27, 2015 10:06:05 GMT
ZOPA appear to have received a "clarification" from HMRC to say that fees can NOT be deducted before declaring for tax purposes -- previously ZOPA had said you *could* deduct fees, and had been doing so for tax statements etc.
From this April, this ends.
I think FC have always considered fees NOT deductable, so it shouldn't change anything. FC and Zopa have always taken opposing views on this, both "supported by HMRC advice".
But it turns out ZOPA had to back down on that one.
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blender
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Post by blender on Mar 27, 2015 10:24:37 GMT
I have never seen FC make a statement on the question of the 1% fee, and the guidance on the site is silent - one is supposed to take professional advice if needed. I have always been guided by the format of the tax statement and have considered why it takes the form it does. I boldly choose the figure which I believe is intended to be declared.
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coop
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Fees
Mar 27, 2015 10:27:51 GMT
Post by coop on Mar 27, 2015 10:27:51 GMT
Flip a coin; then give said coin to the taxman.
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is
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Post by is on Mar 27, 2015 10:37:31 GMT
FC currently explicitly deducts fees in their tax statement. I follow this in the tax filing.
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sand2880
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Fees
Mar 27, 2015 13:46:40 GMT
via mobile
Post by sand2880 on Mar 27, 2015 13:46:40 GMT
Thanks for the responses, seems reporting gross is the prudent thing to do.
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TitoPuente
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Fees
Mar 27, 2015 15:11:10 GMT
Post by TitoPuente on Mar 27, 2015 15:11:10 GMT
Thanks for the responses, seems reporting gross is the prudent thing to do. I don't agree. Interests are what the financial institution finally pays to the saver. Financial institutions can only withhold taxes. If an interest payment is declared to be gross, then what the saver receives *is* the gross interest. Maybe the issue would be less clear is savers would have to pay FC's fees from their bank accounts, but this is not the case.
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sand2880
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Fees
Mar 27, 2015 15:26:39 GMT
via mobile
Post by sand2880 on Mar 27, 2015 15:26:39 GMT
I initially considered fees as a cost of investing but seems this may not be right.
Would be good to know what figure FC report to HMRC to avoid discrepancies.
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Fees
Mar 27, 2015 15:49:16 GMT
Post by GSV3MIaC on Mar 27, 2015 15:49:16 GMT
Well we know what number FC puts on the tax statement they will print for you. That's the one I would use, and the one I'd expect them to report to HMRC, if they have to.
Of course expecting consistency from FC is a bit like expecting <fill in your own absurdity>.
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blender
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Fees
Mar 27, 2015 15:52:40 GMT
Post by blender on Mar 27, 2015 15:52:40 GMT
Unfortunately it is not FC who pays the lender interest, it is the borrower. The fee is not actually a deduction. But this is a platform issue rather than an individual issue and I wait for the platform to change their tax statement or make some other statement.
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sl75
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Fees
Mar 30, 2015 21:20:20 GMT
Post by sl75 on Mar 30, 2015 21:20:20 GMT
Unfortunately it is not FC who pays the lender interest, it is the borrower. The fee is not actually a deduction. But this is a platform issue rather than an individual issue and I wait for the platform to change their tax statement or make some other statement. By my understanding, given that this "clarification" is taking effect from tax year 2015/2016 (which has not yet even started), it will not affect any numbers being entered onto a tax return for 2014/15 (the tax year just ending). This would appear to allow plenty of time before any change to the tax statement will be necessary for most platforms - at least for those produced for individuals who require them aligned with the normal tax year.
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blender
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Fees
Mar 31, 2015 7:52:33 GMT
Post by blender on Mar 31, 2015 7:52:33 GMT
Unfortunately it is not FC who pays the lender interest, it is the borrower. The fee is not actually a deduction. But this is a platform issue rather than an individual issue and I wait for the platform to change their tax statement or make some other statement. By my understanding, given that this "clarification" is taking effect from tax year 2015/2016 (which has not yet even started), it will not affect any numbers being entered onto a tax return for 2014/15 (the tax year just ending). This would appear to allow plenty of time before any change to the tax statement will be necessary for most platforms - at least for those produced for individuals who require them aligned with the normal tax year. Fiscal 2015/6 starts in a week. If there has been some ruling which affects the taxation (for income tax) of our FC accounts from next week then I would expect FC to update their FAQs to inform us, before it takes effect. At the moment they advise us to declare the 'appropriate interest'. If it is clear what interest is appropriate from 6th April they should say so - I know nothing about Zopa and would not expect to go there and translate anything it says to the FC platform.
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Fees
Apr 1, 2015 16:45:58 GMT
Post by GSV3MIaC on Apr 1, 2015 16:45:58 GMT
Funny Calculations changed their T&Cs this morning, and one of the items was to move/hide the 1% fees (although when / whether the rest of the website and transaction reports will get to reflect this, I dunno .. the gross rate is built in everywhere, from the bid button to the loan book).
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