ASSETZ Capital investors are questioning the new way the platform includes cashback offers in its tax statements.
The secured business and property peer-to-peer platform has altered the format of its customers’ tax statements due to the introduction of new tax relief rules, which enable investors to offset losses from defaulted loans against interest income.
However, lenders are questioning why incentives such as cashback for signing up through MoneySupermarket are now listed as “other declarable income”.
“Every other P2P platform I know of works on the basis that such a payment, made by the platform and not linked to specific loans, is simply an ‘incentive to lend’ and so not liable to tax under HMRC guidance,” an investor said on the P2P Independent Forum.
“The word ‘declarable’ implies that Assetz Capital believes such a payment should be declared to HMRC, is that the case, or might the heading be changed to ‘other income’ instead?”
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Stuart Law, chief executive of Assetz Capital, responded on the forum that the term could be changed to “other income” and people could take their own tax advice.
“We can’t offer tax advice. Our understanding is that loyalty rewards are taxable income and we have treated it as such,” he said.
“Should you query this, please speak to HMRC or a qualified tax adviser who can help you get more clarity.
“If you have a specific piece of advice from any of those other platforms we would be very happy to look at them but our current advice received is designed into the report.”
HMRC guidance on the tax status of cashback and incentives, seen by Peer2Peer Finance News, shows they are typically taxable when they are annual payments or paid in return for goods or services.
Law declined to comment further on the tax statement to P2PFN.