Zopa Lender

[mattmills8133]

Good morning, it is just a quick question. I have just started lending on Zopa and was reading about having to declare tax. I already have a job and am paying tax through my company, so my question is will I have to pay tax on the profits from my loans even though they are going to be a few pounds and if I do have to pay tax can claim back on my broadband as I will need it to manage my lending account? I am sorry if these questions seem stupid and I may well be a long way off but just thought I would ask.

Kind regards,

Matt Mills

[Incredulum]

How interesting.

Is Zopa lending a trade - with NI implications? And therefore allowable deductions.

Or are expenses incurred just tough?

And what about principal sums lost on defaulting borrowers?

[mattmills8133]

I'm guessing you haven't heard of Zopa, lol. Have a look, http://uk.zopa.com/ZopaWeb/
Basically they offer a service that allows you to lend money to other people rather than them borrowing it off banks, so effectively Zopa is just a middle man, they also chase the money that isn't paid back to people. Have a look, it's a clever idea.

[Generix]

I'm guessing you haven't heard of Zopa, lol. Have a look, http://uk.zopa.com/ZopaWeb/
Basically they offer a service that allows you to lend money to other people rather than them borrowing it off banks, so effectively Zopa is just a middle man, they also chase the money that isn't paid back to people. Have a look, it's a clever idea.

Yeah it's been around for some time now - at least 5-6 years; I used to be a lend on it. Never declared anything to the tax man.

Assume for income tax purposes this would be interest income - I'm no expert though.

[mattmills8133]

I'm guessing you haven't heard of Zopa, lol. Have a look, http://uk.zopa.com/ZopaWeb/
Basically they offer a service that allows you to lend money to other people rather than them borrowing it off banks, so effectively Zopa is just a middle man, they also chase the money that isn't paid back to people. Have a look, it's a clever idea.

Yeah it's been around for some time now - at least 5-6 years; I used to be a lend on it. Never declared anything to the tax man.

Assume for income tax purposes this would be interest income - I'm no expert though.

Yeah, exactly. What sort of earnings and investment were you doing? I am starting with £100, see how that goes for a few months and then pump money into it if I see good healthy returns. I know it's a gamble but for the interest rates I may get in return I don't mind putting spare cash I know I won't need in the short run. I think the max you can put in is £15k, I doubt I will ever get close to that but if you did you could earn about £50 per month from it. Then I am sure the taxman would be interested in you,

[Generix]

Yeah, exactly. What sort of earnings and investment were you doing? I am starting with £100, see how that goes for a few months and then pump money into it if I see good healthy returns. I know it's a gamble but for the interest rates I may get in return I don't mind putting spare cash I know I won't need in the short run. I think the max you can put in is £15k, I doubt I will ever get close to that but if you did you could earn about £50 per month from it. Then I am sure the taxman would be interested in you,

I only had about £1k in there at any one time - it was spread with high/low risk people.

Became a pain in the ass to manage over time though and for too little return. Was just doing it for a bit of fun versus anything serious.