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Post by dan1 on Mar 26, 2017 11:26:23 GMT
I don't think that completing a SA tax return is very arduous. The thing I used to hate was trying to find all the bits of paper I needed. This has become much easier as now most of my 'bits of paper' are online. Even so for the last 10 or more years I have had an A4 envelope on my shelf and mail I get sent which I will need for my return is put straight into that. Even employment income was pre filled in this year, adding savings income took about 10 minutes. Encouraging to hear. I'll register and treat it as a learning exercise if nothing else.
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mason
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Post by mason on Mar 26, 2017 12:30:54 GMT
I don't think that completing a SA tax return is very arduous. The thing I used to hate was trying to find all the bits of paper I needed. This has become much easier as now most of my 'bits of paper' are online. Even so for the last 10 or more years I have had an A4 envelope on my shelf and mail I get sent which I will need for my return is put straight into that. Even employment income was pre filled in this year, adding savings income took about 10 minutes. I'd be less concerned about it if I hadn't purchased an accumulating ETF a few years ago (unwrapped). While up to now I've been able to ignore the retained dividends, since I don't have any tax liability on them, and could easily avoid a declarable CGT event, I am much less confident about calculating the capital gain since purchase should I wish to make a disposal.
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Apr 4, 2017 11:17:11 GMT
Just coming back to this question of whether SA is required or not
Worth noting that HMRC count P2P interest as Other UK Income not it appears income from savings (Interest and dividends from UK banks, building societies etc) and its is to be entered on SA101 additional information (or I presume equivalent section on SA). This would appear to explain the variations between the advice I received from HMRC and the references others have made to the £10k mentioned on the website over and above the £2500 limit also mentioned.
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Post by dan1 on Apr 4, 2017 11:23:37 GMT
Just coming back to this question of whether SA is required or not Worth noting that HMRC count P2P interest as Other UK Income not it appears income from savings (Interest and dividends from UK banks, building societies etc) and its is to be entered on SA101 additional information (or I presume equivalent section on SA). This would appear to explain the variations between the advice I received from HMRC and the references others have made to the £10k mentioned on the website over and above the £2500 limit also mentioned. Thanks ilmoro. It would be treated as other income in the same way that H*****x reward payments and scrip dividends (examples from my own personal experience) are treated. I've decided to register seeing as ignorance is no defence!
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hazellend
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Post by hazellend on Apr 4, 2017 13:55:43 GMT
P2P income is treated as savings income. This is from the gov.uk website.
Savings covered by your allowance
Your allowance applies to interest from:
- bank and building society accounts
- savings and credit union accounts
- unit trusts, investment trusts and open-ended investment companies
- peer-to-peer lending
If you were to put it as other income would it still be liable for savings income allowances?
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mason
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Post by mason on Apr 4, 2017 18:43:39 GMT
Worth noting that HMRC count P2P interest as Other UK Income not it appears income from savings (Interest and dividends from UK banks, building societies etc) and its is to be entered on SA101 additional information (or I presume equivalent section on SA). This would appear to explain the variations between the advice I received from HMRC and the references others have made to the £10k mentioned on the website over and above the £2500 limit also mentioned. If correct, then the £2500 would apply just to this "Other UK Income" category and not to all interest income. With bank/savings account interest excluded, I'm much closer to the £2,500 limit. With FS helpfully defaulting another loan for me to offset against my interest today, I could even be below the limit after deductions (I must say, FS is acting in an exemplary manner when it comes to helping people with their tax planning). P2P income is treated as savings income. This is from the gov.uk website. <snip> If you were to put it as other income would it still be liable for savings income allowances? Taking dan1's example of Halifax Reward payments, which are classed as an annual payment, taxed at source and not included in the Personal Savings Allowance, then it would certainly seem odd to include P2P interest in the same category when it fits so nicely into the savings income category. Since I don't self assess, I don't know what the correct category for interest from UT/OEIC bond funds would be, but I'd imagine the two would sit together. Hopefully when I try to claim my tax rebate in a few days time, I'll receive some guidance as to whether this is the correct procedure.
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stevio
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Post by stevio on Apr 4, 2017 19:22:13 GMT
www.gov.uk/guidance/peer-to-peer-lendingGives guidance on how to complete boxes and which section for SA section and how to offset defaulted loans I knew about the Halifax Reward from the Halifax website, but could you kindly link me to where it was discussed on here please? I believe this is a special circumstance and type of interest, not to be applied to P2P, guidance for P2P above.
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mason
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Post by mason on Apr 4, 2017 19:55:19 GMT
www.gov.uk/guidance/peer-to-peer-lendingGives guidance on how to complete boxes and which section for SA section and how to offset defaulted loans I knew about the Halifax Reward from the Halifax website, but could you kindly link me to where it was discussed on here please? I believe this is a special circumstance and type of interest, not to be applied to P2P, guidance for P2P above. The recent posts are around what to do if you don't self assess (including whether you must register for SA solely because of having a certain amount of P2P income). I don't think Halifax Reward has been discussed here, but it is regularly discussed at length over on MSE. I agree, it is not interest income, so isn't really relevant. I think dan1 was just mentioning it as a type of income that would go into 'Other UK Income'.
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jamesc
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Post by jamesc on Apr 5, 2017 8:12:43 GMT
Does anyone know if a loan is defaulted and shows on the tax statement produced by a site, are we obliged to call it a tax loss in that financial year.
My wife has no income from other sources and earns P2P income pretty much up to £17,000 so pays no tax. However one of her late loans on FS has just defaulted to the tune of £12,000 if claimed in 2016/17 would give her income of around £5,000 which clearly would not effect any tax she pays for 2016/17.
He says with fingers crossed that this loan will ultimately be repaid, assuming she earns around the same level of p2p income in 2017/18 right up to her tax threshold and then again with fingers crossed the loan does repay if she had claimed the loss in 2016/17 then in 2017/18 the £12,000 repayment will be treated as additional income and she will pay tax on it.
Or can we choose not to declare a loss in 2016/17 and assuming it repays (again fingers crossed) in 2017/18 just show the interest received as a taxable item. Yes her tax return will differ from the platforms tax statement but presumably we could argue again fingers crossed that if the loan was recovered in 2017/18 that we never viewed it as unrecoverable which is why we never treated it as a loss in 2016/17.
I guess the other thing to say hopefully by Jan 18 when the tax return needs to be filed we will have the benefit of hindsight and hopefully fingers crossed the loan would have been repaid by then.
I would appreciate any feedback or advice anyone may have.
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archie
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Post by archie on Apr 5, 2017 9:08:33 GMT
Does anyone know if a loan is defaulted and shows on the tax statement produced by a site, are we obliged to call it a tax loss in that financial year.
My wife has no income from other sources and earns P2P income pretty much up to £17,000 so pays no tax. However one of her late loans on FS has just defaulted to the tune of £12,000 if claimed in 2016/17 would give her income of around £5,000 which clearly would not effect any tax she pays for 2016/17.
He says with fingers crossed that this loan will ultimately be repaid, assuming she earns around the same level of p2p income in 2017/18 right up to her tax threshold and then again with fingers crossed the loan does repay if she had claimed the loss in 2016/17 then in 2017/18 the £12,000 repayment will be treated as additional income and she will pay tax on it.
Or can we choose not to declare a loss in 2016/17 and assuming it repays (again fingers crossed) in 2017/18 just show the interest received as a taxable item. Yes her tax return will differ from the platforms tax statement but presumably we could argue again fingers crossed that if the loan was recovered in 2017/18 that we never viewed it as unrecoverable which is why we never treated it as a loss in 2016/17.
I guess the other thing to say hopefully by Jan 18 when the tax return needs to be filed we will have the benefit of hindsight and hopefully fingers crossed the loan would have been repaid by then.
I would appreciate any feedback or advice anyone may have. Government website states :- Tax relief is available to peer to peer lenders who: are liable to UK Income Tax on their peer to peer income make loans through peer to peer lending platforms that are authorised by the FCA are the legal lender at the time when its agreed that the loan has gone bad As she isn't liable to tax that would suggest the debt doesn't need to be offset this year.
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SteveT
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Post by SteveT on Apr 5, 2017 9:56:51 GMT
I doubt she is OBLIGED to claim relief in this tax year but, if she does not, she may get queried in a later year when/if the income reported by the platform direct to HMRC is substantially higher than she reports herself (because of a subsequent recovery against a bad debt she didn't claim at the time). I'd suggest keeping detailed records for future proof!
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ilmoro
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Post by ilmoro on Apr 5, 2017 10:12:28 GMT
jamesc According to the statement issued by FS to its lenders, losses can be carried forward for 4 years so that suggests there is no requirement to declare a loss p2pindependentforum.com/post/180041/threadThe other, unrelated point, to note is if your wife is doing SA she may have to do it on paper due to technical issues with the HMRC software not applying allowances correctly, in which case I think the deadline is September 30. Worth checking up on
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david42
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Post by david42 on Apr 5, 2017 15:10:38 GMT
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gt94sss2
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Post by gt94sss2 on Apr 5, 2017 17:08:04 GMT
Yes, but reading that document important to note that the ability to carry forward losses is limited:
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david42
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Post by david42 on Apr 5, 2017 19:50:04 GMT
Good point, gt94sss2. I had overlooked that significant constraint. I was wrongly assuming we could choose when to use the losses. |
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