Breaking down the Budget
Today was the last Budget before the upcoming General Election and, alongside some of the headline pieces of news, the red box included a number of interesting updates for both Funding Circle investors and borrowers.
Bad debt tax relief
The main news for investors centred on the introduction of new bad debt relief for your lending through Funding Circle. This was first announced by the Chancellor in December’s Autumn Statement, but it was today confirmed that through self-assessment individuals will be able to make a claim for relief on losses incurred from April 2015. This is good news for all investors and, depending on your individual tax situation, we estimate you will soon be able to earn up to 25% more as a result of these changes.
As expected there was no immediate update on including your lending within an ISA, however the Chancellor did confirm that results from the consultation will be released this summer, once the General Election has passed. Conversations have so far been very positive with the Treasury and we remain confident that there will be confirmation on how your lending will be able to be structured within an ISA this year. You can read more about our recommendations for a Lending ISA here.
In other tax news the Chancellor also confirmed that from next year the first £1,000 individuals earn from investments will be take free.
Business referral platform
Finally, for businesses there was some further news around access to finance and greater competition in the market. The Treasury confirmed that it will be inviting expressions of interest from platforms wishing to act as an intermediary for banks to refer on business customers to non-bank platforms. This news is designed to achieve greater collaboration between banks and non-banks and better help businesses looking to access finance – and follows on from existing bank partnerships Funding Circle already has with RBS and Santander.