Tax

But both net and gross figures are given on the FC statement, if it was only one of the figures I agree that it would be best just to go with that.  Whilst a single year's fee may not be that material, it could soon become material if accumulated over several years which could be very costly if the treatment is wrong and is picked up by a query further down the line.  

I find it hard to believe that there is no clearer authoritative guidance and that the platform themselves are not more specific regarding the potential tax implications.  Potential tax implications of must other investments are usually more specifically disclosed by sponsors/issues not withstanding the usual caveats about individuals needing to seek their own advice for their own specific circumstances.  Do FC really believe that all their investors should individually seek professional tax advice on something so fundamental.  The industry is harming itself by being ambiguous.  Rant over....

They did?? Oh I probably missed that since I printed mine out and archived them as soon as they appeared. Still waiting, iirc, for at least one platform to produce a usable number though. Anyway yes, "net payments made to me' is, afaiac, my gross taxable interest income. I suspect HMRC would do better to get an extra 0.001% out of Google or Starbucks than to chase the whole P2P world for tax on fees or cashbacks or whatever.

It seems pretty clear to me that FC's fees are not allowable for tax purposes and therefore lenders should technically be taxed on the gross interest received i.e. not net of the FC fees.

FC are however definitely trying to encourage lenders to declare the net by the layout of their tax statement probably because the other treatment quite significantly impacts the actual returns that lenders get. (Assuming fees of say 10% on gross income and a 40% marginal tax rate, this would equate to a reduction in net return after tax of 0.36%)

FC seem to be very opaque about the point, possibly because they seem to be at a clear disadvantage to many other P2P platforms where all the fees are charged to the borrower which effectively means the fees are tax allowable to lenders.  

I cannot really understand why they don't switch their fees wholly to the lender side (and trim the gross returns) to ensure the problem never arises. I thought I read somewhere that they were going to be doing this but it doesn't seem to have happened.

Ahh yes sorry - I did mean the borrower side.

So you are suggesting they are now just charging fees to borrowers and not to lenders and its just the website that is not presenting it clearly?

Perhaps that is right then, however my lending account seems to have FC fees regularly charged to it so it looks very much like the lender is being charged rather than the borrower paying a netted off rate because the fees have been charged to them.

I will have a look at the T&Cs anyway - Thanks

Your assumptions are correct.  The recoveries on principal defaulted in prior periods (ie the 68p) should be added back to boxes 3 and 1, to the extent that the relief on the bad debt to which the recovery relates was claimed in the prior period.  If no claim for bad debt relief was made in respect to the bad debt that has now been subsequently recovered, no adjustment is required.  This process is to ensure that any bad debt relief previously enjoyed is reversed on any subsequent recovery of the debt.

Will need to do my first declaration for P2P income this year

After looking at the funding circle tax statement and reading this thread I'm confused as to which amount I use from the Funding Circle statement?
"Total interest paid by borrower" or "Income payments made to you"

Based on experience gained since this thread was active I wonder if someone could clarify for me?

Thanks 

Thanks.

Yes, I did mean Funding Circle.
I've now edited my post to reflect this.