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Post by misotu on Jul 8, 2016 12:07:39 GMT
Received an email from Zopa saying that they have updated their tax statements to reflect the fact that we are now able to claim tax relief on bad debt. They also say: If you’ve already used the old ones for 2015/16, don’t worry: they were accurate. The key difference is we’ve split recoveries into two categories: those eligible for tax relief and those which aren’t. In your tax statements we’ve only included recoveries which are considered taxable income.
So I've opened the new one and compared it with the old and after some juggling around with a calculator I can see where some of the amounts in the original have been bundled together in the new. But it looks to me like my net taxable income on the new statement is nearly £25 different.
Is anyone else seeing the same, or am I having yet another senile moment?
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Post by zopaamy on Jul 8, 2016 16:00:00 GMT
Due to changes to tax relief guidelines for peer to peer loans we have now split out recoveries from defaulted loans that previously were eligible for tax relief as these are the only recoveries which are taxable. We also have additional guidance on which bonus items are taxable so this again might help explain any differences (please see our FAQ). Previously we did not provide earnings and principal lost figures to declare to HMRC and lenders were required to work this out for themselves. The new statements have removed items that are unlikely to be taxable based on guidance from HMRC. If you have an account specific query please get in touch with our lender specialist team on 020 7291 8331 and they can provide further clarification.
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Post by Ton ⓉⓞⓃ on Jul 9, 2016 6:09:50 GMT
Due to changes to tax relief guidelines for peer to peer loans we have now split out recoveries from defaulted loans that previously were eligible for tax relief as these are the only recoveries which are taxable. We also have additional guidance on which bonus items are taxable so this again might help explain any differences (please see our FAQ). Previously we did not provide earnings and principal lost figures to declare to HMRC and lenders were required to work this out for themselves. The new statements have removed items that are unlikely to be taxable based on guidance from HMRC. If you have an account specific query please get in touch with our lender specialist team on 020 7291 8331 and they can provide further clarification. Thanks for that zopaamy I've just realized how big the FAQ are... Anyway I've just noticed that Zopa have put up some guidance from HMRC on the "Is there Tax on Cashback" question that I hadn't noticed before, Here: help.zopa.com/customer/portal/articles/1103811which points to: www.gov.uk/hmrc-internal-manuals/business-income-manual/bim100210
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Post by misotu on Jul 10, 2016 18:55:58 GMT
Due to changes to tax relief guidelines for peer to peer loans we have now split out recoveries from defaulted loans that previously were eligible for tax relief as these are the only recoveries which are taxable. We also have additional guidance on which bonus items are taxable so this again might help explain any differences (please see our FAQ). Previously we did not provide earnings and principal lost figures to declare to HMRC and lenders were required to work this out for themselves. The new statements have removed items that are unlikely to be taxable based on guidance from HMRC. If you have an account specific query please get in touch with our lender specialist team on 020 7291 8331 and they can provide further clarification. Thanks for the reply and I am currently trying to plough through the FAQs. What I am perplexed by, however, is that if I had used the earlier version I would have declared around £25 more income. I don't understand what is meant by previously lenders being "required to work out" earnings and principle lost figures "for themselves". What does that mean? Would it have required obtaining additional data not shown on the original statement? Using the figures from the old statement, I cannot arrive at the new figure at all. I can see the differences, and I think I understand the somewhat technical explanations of the tax treatments of various types of payment. But your email states that if I've already used the old statement not to worry, because it was correct and from my documents I simply cannot see how that would be true. However, since no-one else seems similarly baffled I'll go away and peruse everything, see if I can spot my error! 
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james
Posts: 2,205
Likes: 955
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Post by james on Jul 11, 2016 6:39:39 GMT
The most prominent change is due to improved tax relief for individuals for P2P lending.
For loans that are deemed "irrecoverable" from 6 April 2015 onwards a lender is entitled to deduct the capital value at that time from their interest earned during that tax year, carrying any excess into other P2P lending then if necessary into later tax years. Any capital recoveries from those loans then has to be reported as taxable income, replacing the relief that was originally given on the capital.
For the time before 6 April 2015 there is no such income tax relief. The lender pays interest on the interest and can't deduct anything for the losses.
In the case of Zopa this applies to loans that are not covered by the Safeguard feature. For covered loans, the loans are taken over by Safeguard and it can make the claim, while the lenders are prohibited from doing so.
The lower amount to report in your case means that you had some loans deemed irrecoverable that weren't covered by Safeguard or that you were affected by other changes.
Irrecoverable isn't the same as defaulted.
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