The Treasury is stepping up talks on allowing peer to peer lending through an Isa wrapper by setting up an industry working group, Money Marketing understands.
Department officials have held discussions with the industry over the group to examine any obstacles to widening choice in Isas.
The group paves the way for a possible Treasury consultation in the Budget on 19 March.
The move, tipped before last year’s Autumn Statement, would aim to boost funding for small business by incentivising savers to invest through tax relief.
Tisa is pushing for the move alongside the peer to peer lending industry.
The sector is set to be FCA-regulated along with crowdfunding from April, which could add to its credibility.
Last year, Isa savers were allowed to invest in Aim stocks for the first time.
A Treasury spokeswoman says: ”The peer to peer industry had made representations to Government in the past with regards to peer to peer loans and Isas, alongside other tax issues.
“The Government keeps all areas of tax policy under review and will continue to engage with the sector on this and other matters. These discussions remain at an early stage and it is too early to provide any further details.”