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Kufflink P2P lending chat thread
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This is of course correct for someone who refers someone else to a site. They are performing a service for the company and being paid for it - that's taxable income.That is incorrect - sites such as MoneySavingExpert, Quidco, Topcashback or even a door to door seller who tried to get you to sign up for a charity (a 'chugger') or someone selling Tupperware all pay tax on commission from a referral.
It's income, not cashback.
I was doing Kuflink referrals when they started the scheme back in early 2018 and have a tax statement for 2017-2018 which shows this is reported to HRMC (correctly) as taxable income.
I would advise anyone to get your own tax advice not rely on forum posts (from anyone) if in doubt.
I'd love my referrals to be tax free as I started the referral thread but I confirmed (several times!) they are taxable.
When someone joins a site and obtains, say, £50 for making a £1,000 investment for 1 year (whether they are referred by someone else or not), then that would normally not be taxable - subject to how this is reported by the company making the payment of course. They are receiving a promotion deal on a purchase. This is often called cashback and that makes the position clear.0 -
I became self employed last year so just trying to be clear what needs to be declared and what does not.
So on my 2019/2020 tax return form I will declare the interest on the £500 I receive from Kuflink, not declare the £100 cashback and from the differing answers not sure about the £75 I received as a referee.
If I do need to declare it then it will go down in the "Other Income" section and not as interest.
This is my understanding:
If you received the £75 because you referred ("referrer referral") someone else, and they invested using your link, it is declared as 'Other Income', it is taxed (according to your tax band), but does not constitute part of your £1000 PSA allowance.
If you received the £75 because you invested having used someone else's link for that purpose ("referee referral"), it is 'Cashback' of sorts (or at least that's how you can perceive it), and it is not taxed... My caveat would be to note Masonic's words however: "normally not be taxable - subject to how this is reported by the company making the payment of course. They are receiving a promotion deal on a purchase. This is often called cashback and that makes the position clear." Having had this specific conversation myself before regarding Kuflink, I believe Kuflink do not report the latter sum in a manner that would make it taxable...
With Kind regards0 -
That's exactly as I understand it. When you are referred by someone else and get paid as a condition of investing, then if it is taxable (for example it is treated as bonus interest rather than cashback) then it will appear on your tax statement, so providing you use those figures given to you by the platform there is no risk of under-declaring.This is my understanding:
If you received the £75 because you referred ("referrer referral") someone else, and they invested using your link, it is declared as 'Other Income', it is taxed (according to your tax band), but does not constitute part of your £1000 PSA allowance.
If you received the £75 because you invested having used someone else's link for that purpose ("referee referral"), it is 'Cashback' of sorts (or at least that's how you can perceive it), and it is not taxed... My caveat would be to note Masonic's words however: "normally not be taxable - subject to how this is reported by the company making the payment of course. They are receiving a promotion deal on a purchase. This is often called cashback and that makes the position clear." Having had this specific conversation myself before regarding Kuflink, I believe Kuflink do not report the latter sum in a manner that would make it taxable...0 -
I see what you are saying Masonic but as the referee I would assume the tax statement that Kuflink will send me after 12 months will only make note of my £500 deposit, £100 cashback and the interest I receive.
They will not be aware of the £75 I received from the Referrer.
If you received the £75 from the Referrer as a result of using their link to join up, they themselves will incur the "Referrer Referral" tax on their tax certificate. A diligent Referrer should thus always take into account their own prospective taxation prior to deciding by how much they can afford to split their "Referrer Referral" with another (their Referee).
In your case, your Referrer will have received £100, and forwarded £75 to you. As a result, if he is in the 20% tax band, he will have made £5 for himself, if in the 40% tax band, then he will actually incur a £15 loss... Ultimately this is their consideration to make however. It would become yours if you became the referrer for a future referee...
The take-home message for Referrers is to factor their taxation prior to choosing how much to forward to Referees.
With Kind Regards0 -
I see what you are saying Masonic but as the referee I would assume the tax statement that Kuflink will send me after 12 months will only make note of my £500 deposit, £100 cashback and the interest I receive.
They will not be aware of the £75 I received from the Referrer.
In my view the £75 you received from the referrer was a gift (assuming you mean where somebody posted a referral code and you used it, you got £100, they got £100 and gave you £75 of it). Their £100 is taxable as Other Income for their tax affairs (although there does seem to be some differences of opinion on this but I personally am treating them as such) so potentially they get £100 from Kuflink for you using their code, give you £75 of it but then have a £20 tax liability so net gain for them is possibly only a fiver ( or if a higher rate tax payer then a loss of £15)
Your £100 from Kuflink is not taxable (as I understand it from various discussions on tax forums as it is not commission as such ) and the £75 you received from the third party is also not taxable (they had no contractual obligation to give you this ipso facto its a gift).
EDIT obviously crossed with Narge's reply which is on the same lines0 -
Today received the below email but I can't login to play with it as their website is down for maintenance.The Kuflink secondary market is here!
Our team of tech whizzes have been working hard behind the scenes for months to bring you a brand-new marketplace, where you’ll be able to sell your investments and purchase new ones from your fellow lenders.
Many of you told us that you wanted to see a secondary market on offer here at Kuflink, so we hope you’ll enjoy using it as much as we’ve enjoyed building it!
Simply log in to your account and select the ‘Secondary Market’ option on the drop down ‘My Investments’ tab to get started.0 -
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I have had a spinning circle for the past half hour telling me im logging into the site. Reckon its broken.0
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I had that for a while I did manage to get in.I have had a spinning circle for the past half hour telling me im logging into the site. Reckon its broken.
I didn't receive an e-mail notify me of interest payment, but logged in to find the interest had been paid how ever it didn't display the individual interest payments, and logged me out. Tried again and show individual interest payments on the loans.
Look at Secondary Market disappointed to see at par only, and 0.25% fee for selling.
Only have £510 in loans, so will just wait until these are repaid and exit Kuflink.
Was going to withdraw the interest but with the issues seen I'm waiting, as I recall they aren't very quick anyway and not sure about weekend processing of withdrawals, maybe will try Monday.0
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