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Peer2Peer Finance News | September 23, 2019

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Collateral administrator unable to provide tax statements for investor returns

Collateral administrator unable to provide tax statements for investor returns
Marc Shoffman

COLLATERAL investors may be unable to disclose how much interest they earned from the defunct peer-to-peer lender for the 2017/2018 tax year as the deadline for returns looms.

A notice from BDO, the administrator for Collateral – which collapsed last year – said it was unable to provide tax statements due to the incomplete nature of the company’s books and records.

“The administrators are unable to provide tax advice to investors which, in any case, will depend on each individual investor’s specific circumstances,” a note to investors said.

“All investors should therefore obtain their own independent tax advice if they have any queries in relation to their tax returns.

“Investors may present this notice to HMRC to confirm that no summary tax statements for their investments can be generated from the companies’ records.”

Manchester-based Collateral closed down at the end of February 2018 after it emerged that it had been operating without the correct regulatory permissions.

BDO has previously said the estimated aggregated claims of investors and creditors exceed the book value of the assets held by the companies.

The latest update showed BDO – which took over the administration of Collateral in April 2018 – has obtained “numerous spreadsheets, databases and other documents” showing investor holdings but it isn’t in a format that would allow “efficient or effective recovery and manipulation.”

BDO said it had considered restoring the original database, but it was felt this would be too costly.
Instead, the administrators are focusing on working with Collateral’s former IT consultant and its own experts to extract information from the data they have obtained.

The report said recovery of the loanbook remains a “major work stream,” with two property loans settled in full but other borrowers are refinancing or are working on settlement offers.

Some property loan borrowers have not engaged with the administrators and may face repossession proceedings.