The P2P lending sector matches up unrelated individuals (or peers) with money to lend with individuals or small businesses looking to borrow money. Currently the interest that lenders earn via P2P platforms is taxable. The P2P lending industry has also been regulated by the Financial Conduct Authority since April 2014.
In a recent speech to the Peer-to-Peer Finance Association (P2PFA) Summit at LendIt Europe, the Economic Secretary to the Treasury, Harriett Baldwin set out the Government’s approach to innovative finance and peer-to-peer lending.
New rules have also been introduced that allow investors in P2P platforms to offset any losses from P2P loans that become uncollectible against other P2P income, reducing the amount of Income Tax that the individual has to pay on the P2P interest.
The Government is also consulting with the industry on the implementation of new withholding tax obligations, to apply across all P2P lending platforms from April 2017, as part of plans to support and grow the industry.