Jeepers
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Post by Jeepers on Mar 14, 2016 16:42:33 GMT
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pom
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Post by pom on Mar 14, 2016 16:49:44 GMT
I think that it all depends on who's paying the cashback/bonus - if its the platform then its tax free, if it comes from the borrower then it's not (but at the end of the day I guess it's a case of just use the figures on whatever tax statement is provided)
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jonah
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Post by jonah on Mar 14, 2016 17:07:36 GMT
I think that it all depends on who's paying the cashback/bonus - if its the platform then its tax free, if it comes from the borrower then it's not (but at the end of the day I guess it's a case of just use the figures on whatever tax statement is provided) SS put cashback on another line on their tax statement. Howevever I believe that the last set of cashback was on old t&cs loans, which were via SS. Therefore wouldn't that cashback be really interest in disguise and therefore taxable?
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spiral
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Post by spiral on Mar 14, 2016 17:17:16 GMT
I'm sure I read somewhere that if everyone is elegible i.e. it is a straight forward x% cashback, it is taxable however if it excludes certain participants e.g only available for sums greater than £y it is an inducement and therefore not taxable.
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Jeepers
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Post by Jeepers on Mar 14, 2016 18:12:47 GMT
I think that it all depends on who's paying the cashback/bonus - if its the platform then its tax free, if it comes from the borrower then it's not (but at the end of the day I guess it's a case of just use the figures on whatever tax statement is provided) I think when the cashback was been paid it was under the old t&c's where Saving Stream was the borrower and it was them paying the cashback. With the new t&c's when you lend directly to the borrower through Saving Stream. It's Saving stream paying the bonus so assume that wouldn't be taxable as its not the borrower paying? Having said that, it's Saving stream who pays the interest to us every month too, not the borrower but that is still taxable. Could Saving Stream give some clarity on this?
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ablender
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Post by ablender on Mar 14, 2016 18:53:00 GMT
I think that it all depends on who's paying the cashback/bonus - if its the platform then its tax free, if it comes from the borrower then it's not (but at the end of the day I guess it's a case of just use the figures on whatever tax statement is provided) I think when the cashback was been paid it was under the old t&c's where Saving Stream was the borrower and it was them paying the cashback. With the new t&c's when you lend directly to the borrower through Saving Stream. It's Saving stream paying the bonus so assume that wouldn't be taxable as its not the borrower paying? Having said that, it's Saving stream who pays the interest to us every month too, not the borrower but that is still taxable. Could Saving Stream give some clarity on this? Saving Stream only holds the interest paid to us every month. It is the borrower's money. (re new T&C)
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Post by skint4achange on Feb 14, 2018 18:03:18 GMT
Sorry to bring this thread back to life but it has never been answered (As far as I know?) and it is a question I have been asking myself as I prepare to get paperwork ready for next years tax return.
Could Paul64 please clarify the position (Or anyone else who has done a tax return that included bonus/cash back) as to what income from Lendy has to be declared as taxable income?
Many thanks in advance.
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Jeepers
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Post by Jeepers on Feb 14, 2018 18:19:14 GMT
Only interest is taxable. Cashback and other incentives can be disregarded.
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webwizard
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Post by webwizard on Feb 14, 2018 18:22:16 GMT
My understanding is that ALL interest and bonus payments are taxable in the tax year that they are received. However, everyone has a £1000 allowance of earning interest before tax becomes due.The return of capital is not taxed only the interest that you receive. This is whether you remove it from your Lendy account or reinvest it in another loan. If you lost capital as a loan failed to repay, that too can be offset against the income from interest once it becomes clear that the loan is no longer recoverable.
That is my personal understanding an other might comment if this is an accurate view..
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Post by woodyalan on Feb 14, 2018 18:37:53 GMT
It's all a minefield and I'm not sure all p2p companies have the same ideas. Pretty much agreed with webwizard although past experience with FC showed that losses could be claimed back - but when some of the loss was then recovered that became taxable.
I usually ring up the HMRC help line. The first guy usually doesn't know but always passes me on to another expert.
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ped
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Post by ped on Feb 14, 2018 18:40:43 GMT
My understanding is that ALL interest and bonus payments are taxable in the tax year that they are received. However, everyone has a £1000 allowance of earning interest before tax becomes due.The return of capital is not taxed only the interest that you receive. This is whether you remove it from your Lendy account or reinvest it in another loan. If you lost capital as a loan failed to repay, that too can be offset against the income from interest once it becomes clear that the loan is no longer recoverable. That is my personal understanding an other might comment if this is an accurate view.. Not everyone has £1000 tax free allowance, the £1000 nil band is only for none or basic rate tax payers, the amount is reduced to £500 for higher rate tax payers (40%) and I believe reduced further to £0 for highest rate (45%) payers. You should still declare any interest earned, even if you will not have any tax to pay. Last year I printed the tax statement from Ly and posted it with a cover letter to HMRC.
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withnell
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Post by withnell on Feb 15, 2018 11:43:54 GMT
"Bonus" is bonus interest, so should be included in your tax terurn as P2P income (within the alternative investments box)
I'd view Cashback as per any cashback incentive (eg cashback on a credit card) so wouldn't expect to include it in a return, but you should seek advice from your local friendly tax accountant!
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IFISAcava
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Post by IFISAcava on Feb 15, 2018 12:24:49 GMT
"Bonus" is bonus interest, so should be included in your tax terurn as P2P income (within the alternative investments box) I'd view Cashback as per any cashback incentive (eg cashback on a credit card) so wouldn't expect to include it in a return, but you should seek advice from your local friendly tax accountant! Given the size of most people's cashback, the cost of that advice would likely exceed any tax savings! I would just take it as a given that cashback incentives are not taxable and if the taxman ever disagreed pay the back tax and any surcharge rather than accountant, friendly or not. (not advice etc!)
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stub8535
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personal opinions only. Not qualified to advise on investment products.
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Post by stub8535 on Sept 23, 2018 12:14:08 GMT
Maybe HMRC have answered the question with the treatment of bonuses on the "help to save" accounts that they run. Bonuses are tax free 50% in y 2 and 4.
Conditions apply.
Dyor.
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