Is it deducted (and at what rate), or is it paid gross and you put the interest on your HMRC tax return?I saw on an earlier post that new tax is the greatest threat to P2P lending - is something about to come to make P2P less attractive as an investment option?It is paid gross and you must declare it to HMRC - on a return if sent one, otherwise in a letter. Zopa et al. will also declare it to HMRC like other financial institutions, so HMRC can cross-check your declarations.The 'threat' is I think because losses from lending to private individual borrowers are not tax-deductible.This makes loans to people other than those with A or A* grading unecononmic to higher-rate tax-payers, who are the main source of funds to P2P.And such highly graded borrowers can often get cheaper loans elsewhere than through P2P lending.
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