stevio
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Post by stevio on Apr 13, 2016 16:09:59 GMT
HMRC have requested a summary of interest payments made by borrowers to lenders. This would be in line with what your bank etc may provide, I guess. IMHO though it looked like a dry run rather than a full-on investigation into the sector. Itemised by lender or overall? Did they want to know the amount lent as well? Lender names, dates of birth and NI numbers? Wondering if they are looking to try to get a handle on the potential revenue or how they might tune evasion detectors based on interest rate assumptions for P2P vs deposit accounts. Big difference in assumed capital for possible evasion detection between 1% savings account, 6% P2P, 12% P2P and 26% P2P and platforms could definitely help with that by showing the higher levels of interest payment to HMRC. HMRC doesn't ask for or normally get individualised amounts per platform from P2P lenders so it'll be interesting to know what they are looking for. Where is the 26% P2P
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stevio
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Post by stevio on Apr 13, 2016 16:11:29 GMT
It was broken down by lender BUT (and the reason why I think that this was a dry run) whilst they asked for lender information, P2P platforms don't have a common identification method such as requiring an NI number or passport number. As James eluded to, I suspect that part of this process was for HMRC to get a grip on how to deal with this industry on a long-term basis. That being said, people should always be aware that if your interest is taxable it should be declared. But you weren't currently able to tell us if it was taxable, if I remember correctly?
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james
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Post by james on Apr 13, 2016 16:31:46 GMT
Where is the 26% P2P The average interest rate on my non-defaulted Bondora loans is currently 26.9%. My Pound XIRR is currently about 10.1% after assuming 100% loss of defaulted amounts and ignoring HMRC tax relief. In euros on the same basis it's around 16.9% XIRR. I expect both XIRRs to increase because the loan book is now relatively mature and after the early high default rate period and because of recoveries from the defaulted loans. Subject to exchange rate movements, though. This picture is not available to new investors, it's for only Estonian borrowers and for investments made from the start of when they became available to non-Estonian lenders until the end of 2014. I don't generally recommend use of Bondora now, partly because better combinations of risk and return appear to be available elsewhere.
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unmadem
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Post by unmadem on Apr 13, 2016 16:45:28 GMT
HMRC have requested a summary of interest payments made by borrowers to lenders. This would be in line with what your bank etc may provide, I guess. IMHO though it looked like a dry run rather than a full-on investigation into the sector. Do you mean "interest payments" or was it income earned i.e. did it include instant returns or not ?
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Post by ablrateandy on Apr 13, 2016 17:23:19 GMT
I mean "interest payments". That is not to say that what we experienced is a fixed method but it is probably a reflection of how HMRC view us - a method of distributing those payments.
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gt94sss2
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Post by gt94sss2 on Apr 13, 2016 19:48:52 GMT
If you are sure that you do not owe any tax for 2105-6 and do not wish to reclaim any tax and have not been asked by HMRC to complete a self assessment, then you need do absolutely nothing - not even worry. The above is correct. If/When you do need to earn enough to pay tax, its your responsibility to inform HMRC and not to assume they will contact you. However, if its only a small sum of taxable income this can be done via a simple letter (even a phone call) to HMRC and they are very unlikely to ask you to fill in a tax return.
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Post by ladywhitenap on Apr 14, 2016 8:47:30 GMT
Interesting idea James, but can I legally claim tax relief on a pension payment when I'm not paying any tax in the first place?? I've not paid any tax since 1987. LW Yes, as an unemployed/retired person you can contribute a maximum of £2880 to a SIPP, this is automatically upgraded by £720 by the SIPP provider to make a £3600 contribution to your SIPP. If you were to then draw this pension pot down you would receive £3600 X 0.25 tax Free = £900 + £3600x.75 taxable. Assuming all this is taxed at 20% = £2700 * 0.8 = £2160 (could be better is taxable inc less that £11,000) £900 + £2160 = £3060 ie Pay in £2880 take out £3160 a profit of £180 The same £2880 invested in AR etc at 12% would have become £3225.60 in one year On the basis that within a year or two George O will get his way and drop tax relief on pension contributions and start up the Pension Isa (PISA?) scheme, I presume the above scheme is likely to go away. Also with only a small gain of £180 a year without growth, it is hardly worth it. If I started a SIPP linked to P2P then the figures get better but when drawing it out at age 75 if I get that far(!) then in that year I'm likely to be in high rate tax bracket unless I can split the withdrawal over a tax year boundary. Not sure that it is worth it really. I think I'll wait until IFISA gets established on P2P platforms as a simpler tax avoidance measure unless that nice Mr Corbyn abolishes all tax on retired folk - I wish! LW
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james
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Post by james on Apr 14, 2016 11:30:57 GMT
You don't have to wait until you are 75. You can take the 2880 out just after paying it in and the tax relief once it is added or take both a few weeks after paying in.
The gain is only 180 if you have no personal allowance left. If you have say 1000 left that's another 200 of gain, up to a maximum extra gain of 540 if 2700 of personal allowance is available for possible total gains of 380 or 720.
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pikestaff
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Post by pikestaff on Apr 14, 2016 17:54:17 GMT
...How much information about taxable interest does Ablrate give to the the revenue and when does it happen?... I believe that since last year p2p platforms have been under the same obligation as banks to report to HMRC on interest paid to lenders, individully by lender. I have experience of HMRC makiing use of this information when submitted by banks. I got a query one year for which I had a good answer and they went away happy. But in your situation, just relax as others have said.
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blender
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Post by blender on Apr 15, 2016 7:43:40 GMT
...How much information about taxable interest does Ablrate give to the the revenue and when does it happen?... I believe that since last year p2p platforms have been under the same obligation as banks to report to HMRC on interest paid to lenders, individully by lender. I have experience of HMRC makiing use of this information when submitted by banks. I got a query one year for which I had a good answer and they went away happy. But in your situation, just relax as others have said. I also have that experience. For 14-15 I reported my FC interest by letter - no self assessment - and they sent me a tax calculation which included an additional mysterious figure of a little over £1300 of taxed interest. Eventually I worked out that it was my share of the interest reported on a bank saver account and should have been about £13 but they had not noticed the decimal point. Trust them not, especially as in future it will be reported untaxed.
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Post by ladywhitenap on Apr 16, 2016 16:08:25 GMT
You don't have to wait until you are 75. You can take the 2880 out just after paying it in and the tax relief once it is added or take both a few weeks after paying in. The gain is only 180 if you have no personal allowance left. If you have say 1000 left that's another 200 of gain, up to a maximum extra gain of 540 if 2700 of personal allowance is available for possible total gains of 380 or 720. Interesting, Thank You James. Is there anything to prevent this being repeated each year (up to age 75) in order to use up left over tax allowance? LW
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Post by brianac on Apr 16, 2016 17:02:24 GMT
You don't have to wait until you are 75. You can take the 2880 out just after paying it in and the tax relief once it is added or take both a few weeks after paying in. The gain is only 180 if you have no personal allowance left. If you have say 1000 left that's another 200 of gain, up to a maximum extra gain of 540 if 2700 of personal allowance is available for possible total gains of 380 or 720. Interesting, Thank You James. Is there anything to prevent this being repeated each year (up to age 75) in order to use up left over tax allowance? LW Aren't their rules on "recycling" (which I think I've probalby fallen foul of, but that's another tale) Brian
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james
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Post by james on Apr 16, 2016 19:52:01 GMT
Interesting, Thank You James. ... Is there anything to prevent this being repeated each year (up to age 75) in order to use up left over tax allowance? Nothing. Aren't their rules on "recycling" (which I think I've probalby fallen foul of, but that's another tale) There are but one of the thresholds is that the amount of lump sum received in rolling twelve month periods must exceed £7,500 and it is impossible to get that level of lump sum from a £3,600 gross pot, nor two if two happen to be within the same twelve months due to unfortunate timing. The recycling rules are very commonly misunderstood so if you start a new topic elsewhere and reference my name so I see the notification I'll take a look.
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