So the HMRC guidance states (paraphrased without losing meaning hopefully!):
If you get interest it's taxable.
If you have bad debts these can be set against the interest (so far so good)
If a previous bad debt is recovered "the amount is treated as new peer to peer income of the lender"
So my question is...
Bad debt £200
Recovered bad debt from last year £50
Is the taxable amount £0 (as £100 - £200 + £50 < 0), or
is it £50 as the £200 comes off the interest, but the £50 receovered is new income?
It's that wording that is throwing me, they say "new peer to peer income", not "new peer to peer interest". Oh, and that's from https://www.gov.uk/guidance/peer-to-peer-lending#claiming-tax-relief-on-..., I can't find anything legislative.