mikes1531
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Post by mikes1531 on Oct 27, 2014 12:14:06 GMT
That means if Funding Circle have brokered 200 million in loans that’s £40 million owed to the tax man and he will hardly ignore that. Can someone try to clarify this for me? : I can't address the main point because I know nothing about the subject, but I will point out that brokering £200M or loans does not mean £200M of income has been generated, and surely it's income/interest that would need to have the tax deducted. So the suggestion that £40M of tax is owed is a gross overestimate.
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Post by phoenix on Oct 27, 2014 13:00:31 GMT
I know next to nothing about tax law either, but the idea that any company or organisation that has a bank loan, for instance, should be deducting basic rate income tax from the interest element of their repayments, seems implausible to say the least.
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Post by Deleted on Oct 27, 2014 18:23:43 GMT
R85 ftw.
Starve the bastards out. Buy anything VAT-taxable second hand, brew your own wine, walk instead of driving, keep your income below the threshold of NI and Income Tax.
Nothing you can do about VAT on fuel, Council Tax, TV License and so on but wherever you can, starve them out.
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pikestaff
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Post by pikestaff on Oct 27, 2014 19:00:40 GMT
I’m confused – why is Funding Circle not asking their borrowers to deduct tax before paying lenders their interest/income. I looked this topic up on HMRC and it states clearly “If your company or organisation pays interest, royalties, alternative finance payments, manufactured payments, relevant distributions or any similar recurring payment, you must generally make these payments after deducting Income Tax at the basic rate - currently 20 per cent” That means if Funding Circle have brokered 200 million in loans that’s £40 million owed to the tax man and he will hardly ignore that. Can someone try to clarify this for me? You are not looking in the right place. The page you are quoting from search2.hmrc.gov.uk/kb5/hmrc/forms/view.page?record=kOv1Yhw853I&formId=7040 is about Form CT 61, which is relevant when interest has to be deducted, but it does not set out authoritatively when that should be. Note in particular the word "generally". Broadly speaking, unless a company or organisation is a bank, building society or other deposit taker, income tax is required to be deducted at source ONLY on "yearly interest" and "annual payments". HMRC's guidance on what constitutes yearly interest starts here www.hmrc.gov.uk/manuals/saimmanual/SAIM9070.htm, but it is not exhaustive either. There must be sonething about p2p loans that stops the interest being "yearly interest", as defined. It may well be the fact that the borrower has the right to repay the loans at any time without penalty. Whatever it is, HMRC accepts the position. There has been consultation on introducing a requirement for tax to be deducted at source on p2p interest, which could potentially happen from April 2015. I'm not quite sure where this has got to. If it happens, the requirement will be imposed on the platforms, not the borrowers - ie, the platforms will have to deduct tax before they pass the interest on to us.
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Post by oldnick on Oct 27, 2014 20:11:53 GMT
R85 ftw. Starve the bastards out. Buy anything VAT-taxable second hand, brew your own wine, walk instead of driving, keep your income below the threshold of NI and Income Tax. Nothing you can do about VAT on fuel, Council Tax, TV License and so on but wherever you can, starve them out. Those (deleted) could avoid those last three taxes as well. Just saying... 
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gnasher
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Post by gnasher on Oct 28, 2014 5:42:55 GMT
R85 ftw. Starve the bastards out. Buy anything VAT-taxable second hand, brew your own wine, walk instead of driving, keep your income below the threshold of NI and Income Tax. Nothing you can do about VAT on fuel, Council Tax, TV License and so on but wherever you can, starve them out. Those (deleted) could avoid those last three taxes as well. Just saying... ... but then the rest of us need to pay yet more tax for the running costs of said institution, and the upkeep of the individual.
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Post by oldnick on Oct 28, 2014 6:54:32 GMT
R85 ftw. Starve the bastards out. Buy anything VAT-taxable second hand, brew your own wine, walk instead of driving, keep your income below the threshold of NI and Income Tax. Nothing you can do about VAT on fuel, Council Tax, TV License and so on but wherever you can, starve them out. Those (deleted) could avoid those last three taxes as well. Just saying... This comment has been reported by one member of the forum as a personal attack by me on another member. I apologise if it has been taken that way rather than as the light-hearted comment it was intended to be. I also apologise to anyone who has experience of mental ill health personally or otherwise who was upset by the comment.
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Post by max47 on Oct 28, 2014 15:12:21 GMT
Has anyone had experience of declaring tax on P2P interest where your wife is a non tax payer and you are operating your investments as a joint account?
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Post by Deleted on Oct 28, 2014 16:08:34 GMT
Those (deleted) could avoid those last three taxes as well. Just saying... This comment has been reported by one member of the forum as a personal attack by me on another member. I also apologise to anyone who has experience of mental ill health personally or otherwise who was upset by the comment. OMG what is this, North Korea? Come on guys!! For the record, it wasn't I who made that ridiculous report and whoever did needs to grow up! You're a good guy Nick. It's a tough enough job moderating a forum without having to self-censor in case a word might be deemed 'inappropriate' by some commie with a persecution complex. (Hell, is "persecution complex" a mental illness? Are we allowed to mention the existence (or otherwise) of mental illnesses at all or is it automatically offensive just to mention the subject? As a side observation, this reminds me of the public outcry over Ricky Gervais' "Derek": any mention of subjects communists find uncomfortable, whether positive or negative, causes them to reach for the guillotine.... but then almost everything causes communists to reach for the guillotine.) Oh and thanks, will look into it @ those other taxes. Starve 'em out!
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mikes1531
Member of DD Central
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Post by mikes1531 on Oct 28, 2014 21:04:23 GMT
Has anyone had experience of declaring tax on P2P interest where your wife is a non tax payer and you are operating your investments as a joint account? I don't. But if I were in that situation, I'd report half of the income to my tax office. And I'd have my wife do the same with her tax office unless her income was so low that even with her half of the P2P income she still was below the level of income that has to be reported. Hopefully someone who knows more will be along shortly with a more authoritative answer.
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pikestaff
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Post by pikestaff on Oct 29, 2014 8:10:00 GMT
Has anyone had experience of declaring tax on P2P interest where your wife is a non tax payer and you are operating your investments as a joint account? I don't. But if I were in that situation, I'd report half of the income to my tax office. And I'd have my wife do the same with her tax office unless her income was so low that even with her half of the P2P income she still was below the level of income that has to be reported. Hopefully someone who knows more will be along shortly with a more authoritative answer. That would be correct.
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Post by mbwb88 on Feb 18, 2015 13:47:08 GMT
Hi All
Seems I was right, after a lot of digging about and speaking with the HMRC direct on my own tax.
Basically ANY company that pays interest to an individual for more than 364 days is obliged to withhold tax at source, aggregate it and report it via a CT61 . That simple! There is NO exemption for P2P.
pikestaff they do NOT have to be a bank etc, that is an entirely different set of legislation and nothing to do with businesses paying interest to individuals. I also asked about loans that can be paid back early and what happens to withholding tax - if the starting term is 365 days or more tax is due, if it is repaid early then the individual can claim this tax back in his/her tax return.
If you are not earning enough to pay income tax you can claim the money paid by the company back.
And yes I was wrong on the Funding Circle borrowers - it would be 20% of the interest paid. Still not a small sum for those companies that could get caught and fined
Couple of links I found
taxsummaries.pwc.com/uk/taxsummaries/wwts.nsf/ID/JDCN-89HU8L www.bakertilly.co.uk/publications/Pages/Withholding-tax-watch-out.aspx
Hope that helps
Cheers all
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Post by batchoy on Feb 18, 2015 14:37:39 GMT
Hi All
Seems I was right, after a lot of digging about and speaking with the HMRC direct on my own tax.
Basically ANY company that pays interest to an individual for more than 364 days is obliged to withhold tax at source, aggregate it and report it via a CT61 . That simple! There is NO exemption for P2P.
pikestaff they do NOT have to be a bank etc, that is an entirely different set of legislation and nothing to do with businesses paying interest to individuals. I also asked about loans that can be paid back early and what happens to withholding tax - if the starting term is 365 days or more tax is due, if it is repaid early then the individual can claim this tax back in his/her tax return.
If you are not earning enough to pay income tax you can claim the money paid by the company back.
And yes I was wrong on the Funding Circle borrowers - it would be 20% of the interest paid. Still not a small sum for those companies that could get caught and fined
Couple of links I found
taxsummaries.pwc.com/uk/taxsummaries/wwts.nsf/ID/JDCN-89HU8L www.bakertilly.co.uk/publications/Pages/Withholding-tax-watch-out.aspx
Hope that helps
Cheers all
this issue arose with a loan on the AC platform where a borrower deducted the tax at source having been given advice to do so, much to the consternation of everybody. After consultation between AC and HMRC, HMRC have come back with the advice that the borrower should not be deducting at source. One of the reasons for this advice is the sheer impracticality of the borrower being able to provide individual lenders with the relevant documents for the amount of tax that has been deducted should they deduct the tax, additionally because the P2P platforms are not paying the interest, they are merely conduits through which the interest is distributed they are (currently) not responsible for withholding the tax.
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