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Post by snappyfish on Jan 26, 2016 18:20:20 GMT
So I am new to p2p investments and only started late November 2015.
Savings Stream was my first investment and have received some interest which is currently still in saving stream on loan etc.
How do I declare this for tax purposes?
Thanks
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oldgrumpy
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Post by oldgrumpy on Jan 26, 2016 18:41:32 GMT
Shortly after I started I was in this position (2013) so I merely sent a nice letter to the tax office after 5th April telling them how much interest I had and offering to send 20% (my rate) to cover the tax. They phoned me a few days later and arranged to collect the tax by adjusting my PAYE. I can't do that now, so they told me to register and I have filled in an online tax return. Just sent a payment and the rest will come out of that Tewkesbury repayment on Fancy Cracks!
2016-2017 will be different when we get £1000 interest allowance tax free. I don't know how that will be managed considering all the banks/building societies will have to stop witholding tax from interest due. Will we all have to declare every bit from every source so HMRC can apply it to our tax codes?
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am
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Post by am on Jan 26, 2016 19:01:08 GMT
Shortly after I started I was in this position (2013) so I merely sent a nice letter to the tax office after 5th April telling them how much interest I had and offering to send 20% (my rate) to cover the tax. They phoned me a few days later and arranged to collect the tax by adjusting my PAYE. I can't do that now, so they told me to register and I have filled in an online tax return. Just sent a payment and the rest will come out of that Tewkesbury repayment on Fancy Cracks! 2016-2017 will be different when we get £1000 interest allowance tax free. I don't know how that will be managed considering all the banks/building societies will have to stop witholding tax from interest due. Will we all have to declare every bit from every source so HMRC can apply it to our tax codes? My understanding is that the banks and building societies are going to tell the government how much they've paid you. (Hence news reports on the "end of the tax return".) But I expect that HMRC will send me a letter clarifying things sometime between April 2016 and May2017.
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james
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Post by james on Jan 26, 2016 19:37:19 GMT
Savings Stream was my first investment and have received some interest which is currently still in saving stream on loan etc. ... How do I declare this for tax purposes? If you fill in a tax return, add it to the UK interest section as untaxed interest. If you do not fill in a tax return or want to tell them sooner so they can adjust your tax code, tell HMRC by letter or phone call. If you are on PAYE, you can tell HMRC during the tax year the estimated amount for the year and they will adjust your tax code for the rest of the year to cover it. This applies whether you file a tax return or not. It means paying the tax earlier so you might prefer not to do it because it isn't mandatory but they will probably just assume the same amount for the next year in its tax code so it's only a short term gain. If someone using PAYE hasn't told HMRC for a few years HMRC is unlikely to charge any penalties for amounts in the hundreds of Pounds at least. They would just put in the necessary adjustments to PAYE tax code to collect the underpaid tax. If the interest is foreign, for amounts up to £2,000 it's also reported as untaxed UK interest but the amount that is foreign needs to be noted in the tax return comments section. A tax return is required if even a penny of foreign interest is received. For a total above £2,000 the foreign pages must be used and those require reporting of amount by the country in which the interest was paid - not where the P2P firm is based, where the borrower paying the interest is based. You can use any reasonable method for the exchange rate issues. Daily, monthly and annual average rates are available from a variety of sources. It's not particularly tough using a spreadsheet to use daily rates after downloading them for the year from say the ECB, provided the P2P firm makes downloadable payment histories available.
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james
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Post by james on Jan 26, 2016 19:41:01 GMT
My understanding is that the banks and building societies are going to tell the government how much they've paid you. (Hence news reports on the "end of the tax return".) But I expect that HMRC will send me a letter clarifying things sometime between April 2016 and May2017. They already do tell HMRC but HMRC doesn't use the information to set tax codes, only as a possible trigger for investigations. Some people who are using tax returns are now on a beta system where more information of that type from monthly or annual reporting is used to automatically fill in parts of the tax return. If I remember correctly it's about one in five of those using the online system.
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adrianc
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Post by adrianc on Jan 26, 2016 19:42:57 GMT
To get the relevant numbers, go to My Account -> Tax Statement, and put the tax year dates in. Nice and easy, unlike a certain blue-coloured griffin-themed bank who seem utterly incapable of sending SWMBO a tax statement for her savings account with them...
If you only joined SS in Nov '15, don't forget that the FY 15-16 tax year hasn't ended yet, and you've got until next Jan for the return.
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Post by snappyfish on Jan 26, 2016 20:22:29 GMT
To get the relevant numbers, go to My Account -> Tax Statement, and put the tax year dates in. Nice and easy, unlike a certain blue-coloured griffin-themed bank who seem utterly incapable of sending SWMBO a tax statement for her savings account with them... If you only joined SS in Nov '15, don't forget that the FY 15-16 tax year hasn't ended yet, and you've got until next Jan for the return. Great, so I just get all the figures from the tax statement (interest earned) from various p2p investments involved in and declare that? So FY 15-16 for me will be start date Nov 15 to 6th April 16 and I must declare that before Jan 2017?
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adrianc
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Post by adrianc on Jan 26, 2016 20:26:03 GMT
Great, so I just get all the figures from the tax statement (interest earned) from various p2p investments involved in and declare that? Yep, that simple. Yep. If you aren't already set up on the HMRC website for self assessment, get started sooner rather than later. It's not the most obvious of processes. And remember... You can get started on filling it all in on the 7th April. You don't have to wait until the post-Christmas panic... (Hands up who else...?)
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bigfoot12
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Post by bigfoot12 on Jan 27, 2016 8:08:18 GMT
Finished last night, 5 days to spare, no panic.
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pikestaff
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Post by pikestaff on Jan 27, 2016 8:50:42 GMT
...You can get started on filling it all in on the 7th April... You could, but I generally do mine at the beginning of June when all the tax statements are available (they must be issued by the end of May). If I'm owed money I submit the return asap after that. If I owe HMRC I wait until January before I submit.
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webwiz
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Post by webwiz on Jan 27, 2016 9:32:59 GMT
I do mine in May/june as soon as all the data is available whether I owe them or not. I like to get it out of the way and they are not busy then if there are any queries. At my advanced age it would be risky leaving it too late in case I was incapacitated. I dare not think what SWMBO would make of it if she had to sort it out. But you can get ill at any age....
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pom
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Post by pom on Jan 27, 2016 11:17:37 GMT
...You can get started on filling it all in on the 7th April... You could, but I generally do mine at the beginning of June when all the tax statements are available (they must be issued by the end of May). If I'm owed money I submit the return asap after that. If I owe HMRC I wait until January before I submit. Even if you owe money it can be quite difficult to pay them early, so nothing to stop you submitting early but paying later (so long as you remember of course!)
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SteveT
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Post by SteveT on Jan 27, 2016 12:20:13 GMT
I think it only fair the Chancellor gets an early steer from me on how little he's managing to extort, else he gets overexcited and spends too much. Therefore I do my return in late May / early June and pay as late the following Jan as feasible (I reluctantly sent him last year's yesterday).
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pikestaff
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Post by pikestaff on Jan 27, 2016 15:43:33 GMT
You could, but I generally do mine at the beginning of June when all the tax statements are available (they must be issued by the end of May). If I'm owed money I submit the return asap after that. If I owe HMRC I wait until January before I submit. Even if you owe money it can be quite difficult to pay them early, so nothing to stop you submitting early but paying later (so long as you remember of course!) I think remembering is easier than it used to be, if they have your email address. My wife's had several reminders in the last month. But I'm on PAYE. Wouldn't they try to get back money owed through my tax code?
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oldgrumpy
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Post by oldgrumpy on Jan 27, 2016 15:52:51 GMT
You could, but I generally do mine at the beginning of June when all the tax statements are available (they must be issued by the end of May). If I'm owed money I submit the return asap after that. If I owe HMRC I wait until January before I submit. Even if you owe money it can be quite difficult to pay them early, so nothing to stop you submitting early but paying later (so long as you remember of course!) Why would anyone pay HMRC early when you can invest the money in a Building Society and get 0.5-1.0% interest (less 20% tax at present)? 
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