Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • dj2006
    • By dj2006 23rd Apr 09, 10:00 AM
    • 20Posts
    • 1Thanks
    dj2006
    What happens if I go over my allownace?
    • #1
    • 23rd Apr 09, 10:00 AM
    What happens if I go over my allownace? 23rd Apr 09 at 10:00 AM
    Early on last (tax) year I put £1300 into an existing ISA, later on I then opened a new ISA & put the remaining £2300 in. In a subsequent conversation with someone from the new ISA company they said I still had the remaining £1300 to go, so thinking maybe I'd made the mistake I put it in. But then checking my records I find I was right & I've actually gone over for that year. So what's going to happen? Will they suss eventually? Will they just return the money? Or will it just sit there not attracting any interest, or will I have to pay tax on any interest for that money?

    Hmmm...
Page 1
    • Hungerdunger
    • By Hungerdunger 23rd Apr 09, 10:48 AM
    • 927 Posts
    • 479 Thanks
    Hungerdunger
    • #2
    • 23rd Apr 09, 10:48 AM
    • #2
    • 23rd Apr 09, 10:48 AM
    Here's your answer
    "The trouble with quotations on the Internet is that you never know whether they are genuine" - Charles Dickens
    • dazeruk
    • By dazeruk 23rd Apr 09, 10:53 AM
    • 309 Posts
    • 203 Thanks
    dazeruk
    • #3
    • 23rd Apr 09, 10:53 AM
    • #3
    • 23rd Apr 09, 10:53 AM
    I think you're gonna have the full £3,600 returned ie the £2,300 plus the later £1,300 deposit.

    By putting the first £1,300 into your existing ISA that became your ISA subscription for 2008/2009. You then opened a second ISA, which is allowable but only for transfer purposes, and deposited £2,300 into that. That would count as two subscriptions within a single tax year which is not allowed. Your new ISA company only knew know about the deposit of £2,300 into their ISA product and therefore stated that you had £1,300 remaining from your yearly ISA allowance. You shouldn't have been saving with them at all.

    I think the tax office will catch up on this at some point.
    Last edited by dazeruk; 23-04-2009 at 1:47 PM.
    • dj2006
    • By dj2006 23rd Apr 09, 11:43 AM
    • 20 Posts
    • 1 Thanks
    dj2006
    • #4
    • 23rd Apr 09, 11:43 AM
    • #4
    • 23rd Apr 09, 11:43 AM
    That's terrible! So the 3600 allowance is into one account only for that tax year? I didn't know that, not sure they made that clear either.

    Oh dear...
  • BruceyBonus
    • #5
    • 23rd Apr 09, 11:45 AM
    • #5
    • 23rd Apr 09, 11:45 AM
    That's terrible! So the 3600 allowance is into one account only for that tax year? I didn't know that, not sure they made that clear either.
    Originally posted by dj2006
    You would have agreed to subscribe to only one ISA in that tax yeat when you signed the terms and conditions.
  • Baldur
    • #6
    • 23rd Apr 09, 12:00 PM
    • #6
    • 23rd Apr 09, 12:00 PM
    You would have agreed to subscribe to only one ISA in that tax yeat when you signed the terms and conditions.
    Originally posted by BruceyBonus
    You would have declared that you had not and would not subscribe to any other Cash ISA in that tax year when completing the application forms for both accounts.
    • david78
    • By david78 23rd Apr 09, 5:57 PM
    • 1,554 Posts
    • 561 Thanks
    david78
    • #7
    • 23rd Apr 09, 5:57 PM
    • #7
    • 23rd Apr 09, 5:57 PM
    Well I have different information. If you have exceeded your ISA allowance in one year (or pay into more than one ISA), but not in the previous year, then HMRC will write and tell you about it, with a leaflet explaining the rules. They will then quite probably let you off for your error.

    If you ring the ISA helpline and explain it was an oversite they will sort out a letter for you.

    If you do this in two consecutive years, they close and void the last account you opened. You get your money back less a deduction for tax on any interest you earned.
    Last edited by david78; 24-04-2009 at 8:48 PM.
    • dazeruk
    • By dazeruk 23rd Apr 09, 7:00 PM
    • 309 Posts
    • 203 Thanks
    dazeruk
    • #8
    • 23rd Apr 09, 7:00 PM
    • #8
    • 23rd Apr 09, 7:00 PM
    Well I have different information. If you have exceeded your ISA allowance in one year, but not in the previous year, then HMRC will write and tell you about it, with a leaflet explaining the rules. They will then quite probably let you off for your error.

    If you ring the ISA helpline and explain it was an oversite they will sort out a letter for you.

    If you do this in two consecutive years, they close and void the last account you opened. You get your money back less a deduction for tax on any interest you earned.
    Originally posted by david78
    Different information about what?

    The OP hasn't just exceeded his ISA allowance by £1,300 they've subscribed to two ISAs in one tax year.
    • spike87
    • By spike87 23rd Apr 09, 7:17 PM
    • 538 Posts
    • 192 Thanks
    spike87
    • #9
    • 23rd Apr 09, 7:17 PM
    • #9
    • 23rd Apr 09, 7:17 PM
    I have accidentally subscribed to two ISAs this year. I phoned HMRC and explained the situation and they said they'll let me off. I can keep both ISAs open! Didn't ask for any details or anything.
  • Mikeyorks
    That's terrible! So the 3600 allowance is into one account only for that tax year? I didn't know that, not sure they made that clear either.

    Oh dear...
    Originally posted by dj2006
    The strict interpretation from the ISA Guidance is (my italics) :-


    12.37 There are two situations in which excess subscriptions must be removed from an ISA.
    • The first is where the investor subscribes to a valid combination of ISAs (one cash ISA and one stocks and shares ISA), but subscribes more than £7,200 in total.
    • The second is where the investor subscribes to a invalid combination of ISAs(more than one cash ISA and/or more than one stocks and shares ISA) and subscribes more than £7,200 in total and/or more than £3,600 to cash ISAs.


    ...... however. As you haven't subscribed more than £7200 it's likely you'll get the benefit of a new leniency being shown by HMRC over the past 2 years. And simply get a letter, in due course, telling you not to do it again.
    If you want to test the depth of the water .........don't use both feet !
    • dj2006
    • By dj2006 24th Apr 09, 7:26 AM
    • 20 Posts
    • 1 Thanks
    dj2006
    righto, thanks a lot. i'll call them today & be apologetic.
    • molerat
    • By molerat 24th Apr 09, 7:44 AM
    • 14,451 Posts
    • 8,880 Thanks
    molerat
    Different information about what?

    The OP hasn't just exceeded his ISA allowance by £1,300 they've subscribed to two ISAs in one tax year.
    Originally posted by dazeruk
    Yes they have, read the OP.

    1300 into ISA A, 2300 into ISA B then another 1300 into ISA B.

    Providing of course that were both cah ISA's
    • dazeruk
    • By dazeruk 24th Apr 09, 8:03 AM
    • 309 Posts
    • 203 Thanks
    dazeruk
    Yes they have, read the OP.

    1300 into ISA A, 2300 into ISA B then another 1300 into ISA B.

    Providing of course that were both cah ISA's
    Originally posted by molerat
    Have you actually read and understood my responses in this thread?
    • dj2006
    • By dj2006 24th Apr 09, 10:42 AM
    • 20 Posts
    • 1 Thanks
    dj2006
    think the key word was 'just', easy mistake. Let's not fall out!! :-)
    • dj2006
    • By dj2006 24th Apr 09, 12:10 PM
    • 20 Posts
    • 1 Thanks
    dj2006
    just for the record, i phoned them up & explained, they said that when they get the letters from the banks saying what's what, as David78 said they'll write to me & as it's my 1st time they'll let me off but if it happens again they'll take actioan against both incidents.
    • dazeruk
    • By dazeruk 24th Apr 09, 4:27 PM
    • 309 Posts
    • 203 Thanks
    dazeruk
    just for the record, i phoned them up & explained, they said that when they get the letters from the banks saying what's what, as David78 said they'll write to me & as it's my 1st time they'll let me off but if it happens again they'll take actioan against both incidents.
    Originally posted by dj2006
    Cool, glad they have been positive towards you.
    • david78
    • By david78 24th Apr 09, 8:44 PM
    • 1,554 Posts
    • 561 Thanks
    david78
    My post might not have been completely clear. They should let you off if you pay too much in or if you open more than one account, provided its a genuine mistake.
Welcome to our new Forum!

Our aim's to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

230Posts Today

1,374Users online

Martin's Twitter