According to Giles Andrews, CEO and co-founder of Zopa (one the UK’s larges P2P lending platforms), something momentous has happened to the UK peer-to-peer lending industry, as the government finally confirmed its plans to introduce a new type of Isa covering peer-to-peer loans. This boost for the sector comes a decade after his company Zopa pioneered the concept back in 2005. This new Isa is game-changing for UK peer-to-peer platforms but even more so for lenders.
From next April, the new innovative finance Isa (Ifisa) will include peer-to-peer loans. This means everyday consumers will be able to lend over £15,000 tax free, with the Isa limit due to rise in line with inflation next year, and they may be able to transfer funds from existing Isas as well. Zopa and other members of the industry body, the Peer-to-Peer Finance Authority, have been pushing for years to make interest from peer-to-peer loans tax-free. In our view, it is only fair that peer-to-peer is treated in the same way as bank savings and stock-market investments when it comes to the tax system. UK savers have suffered long enough from poor returns since the financial crash and this new Isa will be a big boost for millions of Brits to earn more by lending to fellow consumers or businesses and get a better deal in the process.