HMRC has rejected two of the 69 applications brought to it from firms wishing to sell innovative finance Isas.
The firms apply to HMRC to be granted Innovative Finance Isa manager status.
This allows companies to offer the products to customers, but is not a guarantee that from the government or the regulator that the companies can deliver strong investment returns.
As FTAdviser previously reported, figures released at the end of August 2017 showed that only 2,000 innovative finance Isas had been opened to that date, containing £17m of capital.
Innovative Finance Isas were announced in the September 2015 budget, and allow investors to place cash into peer-to-peer investments without paying tax on the gains.
A year after the products launched, there were only 14 providers in the market.
The Isa allowance for the 2017/2018 tax year is £20,000, investors can place the capital into cash, stocks and shares or innovative finance Isas, but the total across all three products must not exceed £20,000.
David.Thorpe@ft.com
