Peer to Peer Lending Tax Calculator

P2P lending interest is taxed as savings income (not capital gains). It's subject to income tax at 20/40/45% depending on your total income, after deducting the Personal Savings Allowance.

Basic rate taxpayers get £1,000 PSA (20% rate). Higher rate taxpayers get £500 PSA (40% rate). Additional rate taxpayers get no PSA. P2P interest uses this allowance alongside bank savings interest.

Yes. If a borrower defaults, you can deduct the irrecoverable bad debt from your P2P interest income for the same platform in the same tax year, or carry forward to future years.

Yes, if your P2P income plus other savings income exceeds your Personal Savings Allowance, you must report it on Self Assessment. Many platforms provide annual tax statements.

The Innovative Finance ISA (IFISA) allows P2P lending to be held within an ISA wrapper, making returns completely tax-free. Most major P2P platforms offer IFISA accounts.

Major UK P2P platforms include Funding Circle (business loans), Zopa (consumer loans), Folk2Folk (rural property), and Lending Works. Many platforms have restrictions or are FCA-regulated.

P2P lending is not covered by FSCS deposit protection. Returns depend on borrower defaults. Rates of 4-12% reflect significant risk. Platforms must be FCA-authorised and hold client money separately.

P2P interest earned by a limited company is treated as investment income subject to corporation tax (19-25%). Bad debt relief is also available against corporate tax.

P2P bad debt losses can only be offset against P2P interest income from the same platform, and can be carried forward. They cannot offset other types of investment income or capital gains.

Most FCA-regulated P2P platforms issue annual tax certificates or statements showing total interest and bad debts. Check your platform's account section or contact their support.

No. P2P lending involves lending money in return for interest. Equity crowdfunding involves buying shares. Donations-based crowdfunding has no financial return. All three are taxed differently.

Several platforms exited the market after 2020. Surviving FCA-regulated platforms tightened lending criteria. Bad debt rates increased in 2020-21. The sector is smaller but more regulated since then.