No more fees for lending
Lending Works is pleased to announce that lenders will no longer be charged for lending money on the Lending Works peer-to-peer lending platform.
The decision to entirely remove fees for lenders comes after HMRC clarified the tax treatment of P2P income. HMRC has confirmed that, from 6 April 2015, the amount lenders are required to declare is the full amount of interest arising in the tax year. This means the gross amount of interest paid under their loan agreements without any deductions for any fees or charges imposed by the platform or other party.
In order to ensure our lenders are not negatively impacted by this clarification, we have removed all lending fees. If you lend with other fee-charging platforms from April 2015 you will therefore incur a higher tax charge on the same net income, so you should consider this when comparing advertised returns.
This is great news for our lenders all round, who benefit from higher returns and an added tax saving whilst still benefitting from the market leading lender protection of the Lending Works Shield.
It is also worth noting that you can now shield your P2P income from tax courtesy of the Innovative Finance ISA.
Need more information?
For more information about paying tax on your peer-to-peer lending interest, see our Quick guide to paying tax on P2P income.
If you would like further information please get in touch with us using the contact details listed in the Contact Us page.
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.