Reporting P2P income in online Self-Assessment

itm2

From the HMRC instructions, it seems that P2P interest needs to be declared on a SA101 additional sheet, which is then attached to the online return. The problem is that the income figures on the attachment aren't automatically scanned, so the automated tax calculation on the Self Assessment site doesn't take them into account.
Does anyone know if the bottom-line P2P income figure also needs to be included somewhere in the main part of the online return form, so that it's included in the tax calculation?

masonic

https://www.gov.uk/guidance/peer-to-peer-lending#interest-payments

It goes under: Other UK income, Interest from gilt-edged and other UK securities, deeply discounted securities and accrued income profits, which is available on the electronic self assessment form and is included in the calculation. You need to make this selection when customising your return.

itm2

masonic wrote: »

https://www.gov.uk/guidance/peer-to-peer-lending#interest-payments

Ah OK I needed to check the relevant box when filling in the "Tailor Your Return" section in order to make that section available to me. Thanks

dont_use_vistaprint

This might be a silly question, but I have just sold and transferred everything out of one platform and then back into the same platform but within the innovative finance ISA. Others are all non-ISA as you can only hold one

For next years tax return is the income from this platform not mentioned on the form, from the date it was within the ISA ? I presume P2P providers have to send you a separate tax statement for ISA and non-ISA products

Also is the figure entered the net returns after any fees and losses , the same as income from shares ?

masonic

dont_use_vistaprint wrote: »

This might be a silly question, but I have just sold and transferred everything out of one platform and then back into the same platform but within the innovative finance ISA. Others are all non-ISA as you can only hold one

For next years tax return is the income from this platform not mentioned on the form, from the date it was within the ISA ? I presume P2P providers have to send you a separate tax statement for ISA and non-ISA products

Also is the figure entered the net returns after any fees and losses , the same as income from shares ?

There is no need for a tax statement for an ISA account. The tax statement for your general account will not include anything bought within your ISA.

The figure entered would be the sum of the income from each platform minus any tax relief for capital losses. This is not the same as income from shares, where capital losses cannot be deducted from income. In both cases (P2P and shares), fees are not deductible from income, although I'm not aware of any P2P platform that charges fees. All of the information should be presented in your tax statement(s) and I wouldn't recommend using different figures unless you are very confident your own records will stand up to an investigation.

I'm assuming you are investing in P2P as an individual, since you have have been engaging in some bed&ISA.

dont_use_vistaprint

masonic wrote: »

I'm not aware of any P2P platform that charges fees.

There is a still a 1% servicing fees (FundingCircle) of outstanding loan amounts , the secondary market sale fees were dropped, plus early access fees on Rate Setter.

The FC statement for 17/18 breaks it down like this :

The information provided assumes that you are a UK tax resident individual and wish to take advantage of the new bad debt relief available on loans defaulted since 6 April 2015

Investment Income
Total interest paid by borrower
Funding Circle servicing fee
Income payments made to you

Bad Debt
Principal Defaulted and not recovered in period:
Discounts on acquisitions of above bad debts on secondary
market:
Total eligible bad debt in period:

masonic

dont_use_vistaprint wrote: »

There is a still a 1% servicing fees (FundingCircle) of outstanding loan amounts , the secondary market sale fees were dropped, plus early access fees on Rate Setter.

Blimey, is FC still charging that, it's not very good for individual investors as they can't deduct it from their income. It's fine for people investing through Limited companies who pay corporation tax on their profits, rather than income tax on their interest - so that would be why the service fee is in the tax statement. Presumably RS do the same, although "Selling out", as they like to phrase it, is quite harshly punished and should be avoided at all costs.

Edit: RS has not included fees on any of my tax statements, so either they only include it for those who have incurred it (unlike the referral bonus, which I see as a blank entry), or the fee is actually an interest penalty.

saintalan

masonic wrote: »

There is no need for a tax statement for an ISA account. The tax statement for your general account will not include anything bought within your ISA.

The figure entered would be the sum of the income from each platform minus any tax relief for capital losses. This is not the same as income from shares, where capital losses cannot be deducted from income. In both cases (P2P and shares), fees are not deductible from income, although I'm not aware of any P2P platform that charges fees. All of the information should be presented in your tax statement(s) and I wouldn't recommend using different figures unless you are very confident your own records will stand up to an investigation.

I'm assuming you are investing in P2P as an individual, since you have have been engaging in some bed&ISA.

Just catching up and have read so many IR notes on this and was wondering if the above (and previous post) is still the latest guidance and correct way to submit P2P.


Many thanks


Alan

masonic

saintalan wrote: »

Just catching up and have read so many IR notes on this and was wondering if the above (and previous post) is still the latest guidance and correct way to submit P2P.

Nothing has changed in terms of how to report P2P in your tax return.

chamelion

masonic said:

saintalan wrote: »

Just catching up and have read so many IR notes on this and was wondering if the above (and previous post) is still the latest guidance and correct way to submit P2P.

Nothing has changed in terms of how to report P2P in your tax return.

Thanks for clarifying!
So I'd use the "Income payments made to you:"  amount to put into "Interest etc from gilt edged and other UK securities. Enter the amount after tax was taken off: (optional)" on the tax form, right? Presumably there's no 'relief' on the bad debt amount ("Total eligible bad debt in period:" in the FC tax form). 

masonic

chamelion said:

masonic said:

saintalan wrote: »

Just catching up and have read so many IR notes on this and was wondering if the above (and previous post) is still the latest guidance and correct way to submit P2P.

Nothing has changed in terms of how to report P2P in your tax return.

Thanks for clarifying!
So I'd use the "Income payments made to you:"  amount to put into "Interest etc from gilt edged and other UK securities. Enter the amount after tax was taken off: (optional)" on the tax form, right? Presumably there's no 'relief' on the bad debt amount ("Total eligible bad debt in period:" in the FC tax form).

If you wish to claim bad debt relief, see the link in my previous post. You will need to keep your own records and report only the (interest received less bad debt) figure.