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Post by batchoy on Apr 6, 2015 15:54:57 GMT
Pulling together my tax statements for 2014-15 and the AC platform gives me a contradictory statement ( andrewholgate, chris, Colin), the first paragraph reads: My emboldening. By the way 'withheld' has a double 'h', not one as written in the statement. However the third line of figures reads: Which would indicate that tax was withheld in contradiction of the first paragraph. On the summary page there is a note to the effect: Was this money retained and paid by AC or was it actually retained and paid to HMRC by the borrower of loan #143 or is my tax statement factually incorrect? |
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agent69
Member of DD Central
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Post by agent69 on Apr 6, 2015 16:25:16 GMT
For the sake of £1.58, does it really matter?
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Post by batchoy on Apr 6, 2015 16:37:41 GMT
For the sake of £1.58, does it really matter? Yes when HMRC turns round and does a random full audit of your finances which is what happened to a relative this year and he had to provide every last piece of paperwork. Plus AC have a legal responsibility to provide accurate information and particularly so if they are withholding tax.
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bigfoot12
Member of DD Central
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Post by bigfoot12 on Apr 6, 2015 18:56:28 GMT
For the sake of £1.58, does it really matter? I would say no £1.58 probably doesn't matter. However, if we know there is a £1.58 error it doesn't give much confidence with the other numbers.
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Post by batchoy on Apr 6, 2015 19:14:28 GMT
For the sake of £1.58, does it really matter? I would say no £1.58 probably doesn't matter. However, if we know there is a £1.58 error it doesn't give much confidence with the other numbers. According to my numbers the £-1.58 is not an error, the borrower of #143 withheld 20% Tax the first interest payment and as far as I can see it was never refunded but subsequent payments have had no withholding tax applied. What is at issue is firstly that the statement simultaneously states that tax was not withheld and shows that tax was withheld, secondly the tax statement page states that AC collected the tax and paid HMRC but according to threads on this forum and email correspondence it was the borrower that withheld the Tax and paid it to HMRC. If it was the borrower that withheld the tax, there will be a discrepancy whereby the AC tax statement claims AC withheld the tax but HMRC have no record of AC withholding and paying any tax, since the record will be in the name of the borrower. It is just such trivial but fundamental discrepancies that trigger HMRC tax audits.
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Post by meledor on Apr 7, 2015 9:57:26 GMT
AC has got itself into a muddle on this one. Unlike some other platforms AC is not forthcoming on the details of its loan agreements. Ablrate for example clearly show the loan agreements and for a UK resident borrower such as M***** B******* Ltd it specifies:
7. Taxes
There are no withholding taxes on the payments made to Lending Members on this transaction. Each Lending
member is responsible for reporting any tax liability they may have from income gained in this transaction.
Incidentally it would be useful to know if AC is a true P2P operator like Ablrate where we can see from the loan agreement that the arrangement is directly between the lender and the borrower and not through the platform as an intermediary.
Assuming AC is true P2P (and if it is not I'm not sure why tax was deducted - maybe the borrower realised this after making this payment) then AC on behalf of the lenders needs to ask the borrower to provide a certificate of deduction for each lender showing the amount of tax deducted. AC is not in a position to make any statement on the borrower's behalf.
As a general point I am aware that HMRC is desperately trying to play catch up with the requirements of P2P. Should HMRC decide to enforce the deduction of withholding tax it would alter the dynamics of P2P and I would expect higher interest rates to compensate for the cost of the cashflow impact.
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Post by meledor on Apr 7, 2015 10:55:54 GMT
FYI, the borrower decided independently, after receiving (poor?) advice from their accountant, to withhold 20%. AC was forced to play catchup, through no fault of it's own, and managed to get an assurance from HMRC that this shouldn't have been done. As to what happened to the 20% and subsequent payments, I don't know. Which is exactly my point. If AC had had as part of its loan agreement something similar to what Ablrate have (see my previous post) then the borrower after making the agreement would not have been able to decide independently to do the opposite. I can only think AC were "forced to play catchup" because this was missing from the loan agreements. If so, it is its fault that this muddle has been allowed to arise.
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