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Taxed on our ISA's!

Dunscrimpin
Dunscrimpin Posts: 47 Forumite
in Savings & investments
Hello,

My wife and I have both had substantial amounts of income tax deducted by our bank, in relation to our separate, and differently named ISA accounts for the tax year 2008/2009.

We presume that there are no circumstances under which this can be legal.

I am not a big earner, and my wife is a fulltime mum.

Has anyone experienced this before, and if so, can you please advise on the best course of action?

The local bank staff said they had never seen this before, and only believed us on production of our Income Tax Certificates, as prepared by the bank themselves. They say we will have to apply to HMRC to get our money back.

Would we be due compensation for loss of interest on our erroneously deducted interest?

Any assistance much appreciated.

Regards,

D.
Thanks to all who've gone before, and those yet to arrive.
«13

Comments

  • Xbigman
    Xbigman Posts: 3,927 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    That sounds like a bank error. Are you sure you actually have ISA accounts. For instance, have you transfered in at some point and it might have gone wrong?

    Raise an official complaint through the banks complaint procedure.
    Regards



    X
    Xbigman's guide to a happy life.

    Eat properly
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  • freezspirit
    freezspirit Posts: 994 Forumite
    Part of the Furniture Combo Breaker
    Your wife has filled a R85 for her account right?
  • PBA
    PBA Posts: 1,521 Forumite
    Did you both provide your NI numbers when the accounts were opened? If tax has been paid in error the bank can't claim it back for you, but you won't lose out as you can get it back from HMRC. If they've gone wrong they ought to offer some gesture though.
  • steady__eddie
    steady__eddie Posts: 1,455 Forumite
    Part of the Furniture Combo Breaker Uniform Washer
    Just to confirm, are they CASH I.S.A. s ?
    I have some ancient PEPs and there is an element of tax payable which they knock me for occassionaly. This MAY be the same for Stocks & Shares I.S.A.s, I'm not sure because I haven't ventured into these.
  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    Hi,

    have you somehow managed to over subscribe and being taxed on the excess part of the investment.
  • Aegis
    Aegis Posts: 5,695 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    steady__eddie wrote: »
    Just to confirm, are they CASH I.S.A. s ?
    I have some ancient PEPs and there is an element of tax payable which they knock me for occassionaly. This MAY be the same for Stocks & Shares I.S.A.s, I'm not sure because I haven't ventured into these.
    To confirm: interest paid on cash held in a stocks and shares ISA is taxable.
    I am a Chartered Financial Planner
    Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.
  • Biggles
    Biggles Posts: 8,209 Forumite
    1,000 Posts Combo Breaker
    Aegis wrote: »
    To confirm: interest paid on cash held in a stocks and shares ISA is taxable.
    Actually, there is no 'income tax' payable, it's a 'flat-rate charge' of 20% annually.

    I believe this means it isn't recoverable from HMRC even if your earnings are below the income tax threshold.
  • alanq
    alanq Posts: 4,216 Forumite
    1,000 Posts Combo Breaker
    HMRC ISA Helpline

    http://search2.hmrc.gov.uk/kbroker/hmrc/contactus/search.ladv?cs=UTF-8&ha=34&tx0=19&fl0=contactid:&raction=view
  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    Hi,
    alanq wrote: »
    HMRC ISA Helpline

    http://search2.hmrc.gov.uk/kbroker/hmrc/contactus/search.ladv?cs=UTF-8&ha=34&tx0=19&fl0=contactid:&raction=view

    that link doesn't seem to work (for me), so I've added this.
  • Dunscrimpin
    Dunscrimpin Posts: 47 Forumite
    Hi,

    Just back online.

    Both our accounts of the Mini Cash ISA type.

    Mine is titled " ISA Direct Reward " and my wife's " ISA Saver "

    No overpayment of annual allowance at any point in the life of either of these accounts.

    My wife has filled in her R85 and submitted it as arranged by the bank.

    NI numbers provided by both of us, and all transactions carried out within the local branch.

    Does this assist in clarifying?

    Many thanks for all kind replies to date.

    D.
    Thanks to all who've gone before, and those yet to arrive.
This discussion has been closed.
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