HM Insights

Crowds gather for peer-to-peer lending as new Innovative Finance ISA is introduced

The peer-to-peer lending sector has grown exponentially in recent years, with recent figures published by Nesta showing that, in the UK alone, peer-to-peer business lending reached £1,490 million in 2015 (up from circa. £749 million in 2014 – a 99% increase) and peer-to-peer consumer lending hit circa. £909 million in 2015 (up from £547 million in 2014 – a 66% increase).

Peer To Peer

The start of this tax year (6 April 2016) saw the introduction of a new form of ISA (in addition to the familiar Cash ISA and the Stocks and Shares ISA), namely the Innovative Finance ISA. This effectively allows individuals to extend the tax-free ISA ‘wrapper’ around certain of their peer-to-peer lending investments. 

This new form of ISA is already offered by some peer-to-peer lending platforms, while numerous other platforms are awaiting sign off from the Financial Conduct Authority and expect to roll out their offerings in the coming weeks and months.

The new ISA is expected to result in an influx of investment in peer-to-peer lending in the UK and could well be a catalyst for further considerable growth in the sector over the coming year (with some estimating that this new ISA could increase the volume of peer-to-peer lending in the UK by over 25%).

Get in touch

Harper Macleod has been at the forefront of developments in the alternative finance market in Scotland and has a wide range of experience and expertise in all aspects thereof (including crowdfunding and peer-to-peer lending).  For further advice in this area please contact Paula Skinner or John Pringle.

As a full service law firm, we also have a large private client team which offers the very best legal advice for every aspect of your life (including personal taxation services).  For further advice in this area please contact Tom Monteith or Amber Heron.