Lending Works receives full FCA authorisation
Lending Works are thrilled to announce that we are now officially fully authorised by the Financial Conduct Authority (FCA); a landmark day for our platform that concludes a thorough review process which has lasted nearly a year. As with all platforms in existence prior to April 2014 which held consumer credit licenses under the Office of Fair Trading, we've been operating under interim permission from the FCA until now, having submitted our application for full authorisation in October 2015. Since then, we've seen all areas of the business undergo rigorous evaluation and scrutiny, and we're delighted to receive what is regarded as the ultimate stamp of approval within the financial services sector in the UK.
Our founder and CEO, Nick Harding, commented:
“To receive FCA full authorisation marks a momentous day for Lending Works. This achievement is the culmination of what has been an intensive journey for us over the past year and vindicates all that we do and stand for as one of the UK’s leading P2P platforms. It also firmly validates our processes, systems, policies, financials and levels of compliance and risk management.
“Fair and accessible financial services that uphold the highest standards in both service and governance is a guiding principle of our business. Therefore, we have always supported greater regulation in this sector and welcomed the FCA’s review. The authorisation process is a positive move that will give better protection to consumers, ensure greater transparency and accountability in our sector and will ultimately help grow the profile of peer-to-peer lending in the UK as a genuine, strong and competitive alternative to mainstream, traditional lenders.”
Looking ahead to launch of the Innovative Finance ISA
Since ex-chancellor Chancellor George Osborne announced the launch of the new Innovative Finance ISA (IFISA) - for which peer-to-peer loans would be eligible - at last year’s Summer Budget, much hype had surrounded the prospect of investors being able to benefit from tax-free income from peer-to-peer loans. However, in December 2015 draft legislation confirmed that only platforms with full authorisation from the FCA would be able to obtain ISA manager status from HM Revenue & Customs, thus meaning those operating under interim permission would not be able to offer the new tax-free wrapper when it launched on 6 April 2016.
Yet having now received the green light from the FCA, Nick confirmed that the Lending Works ISA will launch soon; with confirmation of the official launch date expected over the next few weeks once HMRC ISA Manager approval is obtained.
“With full authorisation in hand, the next step for us is to launch our new ISA – something we have spent much of the past few months preparing for," Nick explained. "Given the great benefits this new tax-free wrapper will bring, the level of enthusiasm among our lenders, and indeed consumers within the wider sector, for the new IFISA has been substantial. We very much look forward to delivering this new product in the near future.”
There is barely a week to go until the conclusion of the 2017/18 financial year, which means that, as ISA season begins to hot up, time is running out to take advantage of your ISA allowance.
At the Summer Budget in 2015, George Osborne had multiple nuggets of good news for investors in peer-to-peer lending (P2P), most notably the announcement of the new Innovative Finance ISA (IFISA).
Over the last decade, there can be little dispute that the reputation of mainstream banks – and particularly the so-called ‘Big Four’ (HSBC, Barclays, Lloyds and RBS) – is at its lowest ebb.
The peer-to-peer (P2P) lending industry is now regulated by the Financial Conduct Authority (FCA). The regulatory framework has been designed to protect customers and promote effective competition.
Loan underwriting is the process that we undertake to analyse all of the information provided by each loan applicant and their credit file to assess whether or not that applicant meets our minimum loan criteria. As part of that process all data is verified, analysed and summarised to paint a picture of each applicant.
When you earn interest from a regular bank savings account, for example, the bank automatically deducts basic rate tax (currently 20%) before paying your interest. With interest earned from peer-to-peer lending, tax is not deducted automatically so lenders will need to declare their income to HMRC.
As 2018 draws to a close, with our bellies full of Christmas turkey, it's only natural to look back on the past 12 months and reflect. No doubt, it's been a turbulent one economically and politically, and not everyone has had it all their own way.