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Summer Budget 2015: Innovative Finance ISA

Innovative Finance ISA

In today’s Budget, Chancellor of the Exchequer George Osborne announced plans to introduce the Innovative Finance ISA, covering loans arranged through peer-to-peer platforms, from 6th April 2016. This will allow people to invest their ISA allowance by lending to others through peer-to-peer platforms without being taxed on the interest they earn. This announcement is good news for peer-to-peer investors, who could save substantial amounts on tax each year.

It is hoped that this new category of ISA will provide more choice for ISA investors and result in continued growth for the rapidly expanding peer-to-peer sector, helping to encourage competition among financial providers.

The expected growth of peer-to-peer will also provide increased access to funding for Britain’s thousands of SMEs, many of which have been struggling to get finance from traditional providers in recent years.

The maximum that can be deposited this way is expected to be roughly £15,240, in line with the amount for cash and stocks & shares ISAs, as described in the Moneywise article on the new P2P ISA.

This new type of ISA is being introduced in response to a public consultation on whether to include peer-to-peer loans within ISA-qualifying investments, which was broadly supportive of the government’s proposed actions.


Stuart Lunn, CEO of LendingCrowd, said “The introduction of the Innovative Finance ISA will give ISA investors more choice and will help the peer-to-peer sector thrive, providing greater access to funding for British businesses.”


The Chancellor also confirmed that the government will publish draft legislation later this year which will allow tax relief on bad debts incurred on P2P loans from 6th April 2015 against other P2P income. There will also be new rules brought in from April 2017 on how withholding tax applies to the P2P sector.


We’ll keep you informed of any updates on this over the next few months!

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Lending Crowd

Lending Crowd

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