Don’t invest unless you're prepared to lose money. This is a high-risk investment. You may not be able to access your money easily and are unlikely to be protected if something goes wrong. Take 2 mins to learn more.

Tax, lending and the Innovative Finance ISA

How does it work

Investing via the Crowd2Fund platform can be a great way to get generous tax incentives. The government are hoping to incentivise savers into investing in British businesses as they generate jobs and help grow the economy and create tax revenues for HMRC in return. As such, there are a few tax schemes which you can take advantage and should be aware of. Each tax incentive is clearly shown on the listed campaigns.

Nevertheless, you should bear in mind that your Crowd2Fund portfolio may be liable for tax; you should always check with your accountant or tax advisor. Any repayments made back to you have not had any tax deducted from them.

Innovative Finance ISA

The Innovative Finance ISA is the main tax incentive when investing through Crowd2Fund. The IFISA allows you to earn tax-free returns on your investment. Most campaigns listed are eligible for the IFISA tax scheme, with the IFISA eligibility clearly marked to the right of the APR. Lending products eligible for the IFISA include 'Loans', 'Revenue Loans' and 'Interest-Only Loans'.

When you invest in an IFISA eligible campaign you need to make sure you have activated your IFISA by adding your national insurance number in your portfolio page. The IFISA allows you to invest up to £20,000 in the 2020/2021 tax year into IFISA eligible businesses. The IFISA is still an ISA, therefore investments made into your IFISA count towards your total ISA allowance for that year. You can read more about the IFISA here.

To take advantage of the interest rates available through Crowd2Fund and to help businesses grow, you can transfer your existing Cash ISA and still invest into that year’s ISA allowance. So long as your ISA funds remain within their wrapper, they can be reinvested and not count towards that year’s allowance. You can also convert your Stocks & Shares ISA into a Cash ISA and we will handle the transfer with your existing manager.

Personal Savings Allowance

With Crowd2Fund, you are also eligible to take advantage of the government’s Personal Savings Allowance. If you're a basic rate taxpayer, you'll be able to earn up to £1,000 in savings income tax-free. Higher rate taxpayers will be able to earn up to £500. Please make sure that you take this into account when calculating your potential tax liability. Please confirm this with your account or tax advisor (not within Crowd2Fund). Read here for more information.

Interest from Individual Savings Accounts (ISAs) doesn’t count towards your Personal Savings Allowance because it’s already tax-free.

Type of earning

Income earned by lending via the Crowd2Fund platform is treated as interest earned by HMRC. As such, these earnings are not treated as capital gains income. It's important that you are aware of this when speaking to your advisor and calculating your potential tax liability. Read more about how interest from P2P platforms is treated by HMRC here.

Gross interest payments

All interest payments from Crowd2Fund are paid gross (before tax) and, therefore, you need to make sure that you declare any tax you may be liable for to HMRC on your tax return.

Downloading Crowd2Fund earnings

You can easily download all your earnings from the repayments section in your account. If you navigate to the repayments section labelled ‘Repayments’, any repayment made is provided and the capital and interest for each repayment is clearly shown.


Whilst we do our best with our Risk & Due Diligence, there may come a time when a Crowd2Fund loan defaults. Should this happen, you should be able to subtract this loss from your reported earnings. You can read more about this here.

Lending outside the IFISA

If you wish to lend outside your IFISA allowance, this is only possible after you've fully subscribed to that year’s IFISA allowance. You are not able to select specific investments not to include within your IFISA.


The above information is for informational purposes only. The individual circumstances of investors can vary, and the terms of each scheme are subject to change. For full details of any tax schemes, please refer to HMRC directly or contact your personal financial advisor or tax advisor.

Risk warning

Past performance and forecasts are not reliable indicators of future results. Your capital invested is not covered for compensation in the event of a loss by the FSCS. Tax treatment will depend on the individual circumstances and may be subject to change. Please see our Risk section before making an investment decision.