I'm in an ISA pickle and I'll give a mention in my will to anyone that can offer advi

Edinbra

Hi there,
Due to an error/ignorance on my part I've paid around £2000 into an existing cash ISA (I started that one in the 07-08 financial year- and it now has £4K in total) and £2600 in a separate (higher interest) cash isa in a different company in the same 08-09 financial year. I now realise the limit is £3600 for a one year cash ISA and I'm only supposed to contribute to 1 product. Hence I'm in a pickle and not sure what do I do now to rectify this?
Any thoughts or advice would be greatly appreciated.
Ken

oldagetraveller

Been there, done that, got the letter from the taxman!
Close the second one a.s.a.p. and maybe explain to the provider what you've done.
When and if the IR catch up with you for an explanation, they will, then just write them a grovelling apology advising you closed the 2nd account after realising your error (that's what I did) and they accepted it. It's not as though you've let it run for the full tax year. The IR may ask you for the tax on the interest earned too. Fortunately they let me off for that, it was only a v. small amount anyway.
As to whether you can then add funds to the first ISA, I don't know, you'll need more knowledgeable advice for that.

BruceyBonus

I would contact your tax office and tell them what you have done. They will advise on what to do - they *may* let you keep both ISAs.

The ISA system is so complicated that it is very easy to make mistakes.

isasmurf

The answer is provided on HMRC's website:

What do I do if I pay into too many ISAs?

Specifically DO NOT follow oldagetraveller's advice and close the second ISA. Even if you do you will still be classed as having had that ISA.

Hungerdunger

BruceyBonus wrote: »

The ISA system is so complicated that it is very easy to make mistakes.

In what way is the rule about not putting more than £3,600 per financial year into Cash ISAs complicated?

Oblivion

Hungerdunger wrote: »

In what way is the rule about not putting more than £3,600 per financial year into Cash ISAs complicated?

Possibly complicated by the fact that you've used the term 'financial year' which usually ends on the 31st March, or in some cases on the 31st December, whereas ISAs operate on the basis of Tax Years which end on the 5th April. Pedantic .... moi? :rotfl:


Dave.

Hungerdunger

Oblivion wrote: »

Possibly complicated by the fact that you've used the term 'financial year' which usually ends on the 31st March, or in some cases on the 31st December, whereas ISAs operate on the basis of Tax Years which end on the 5th April. Pedantic .... moi?

No, you're quite right - I should have said "tax year".

Edinbra

Thanks for the useful suggestions. I'll give the ISA Helpline a ring tomorrow and see what they say. I'll post whatever advice they give me.
Thanks,
Ken

Hungerdunger

Edinbra wrote: »

Thanks for the useful suggestions. I'll give the ISA Helpline a ring tomorrow

You'll be out of luck!

ISA Helpline For general enquiries about tax rules on ISAs
Opening hours8.30 am to 5.00 pm, Monday to Thursday
8.30 am to 4.30 pm Friday
Closed weekends and bank holidays

0845 604 1701

(My emphasis)

Incidentally, should it help, SayNoTo0870 gives this number as an alternative to the 0845 number above: 0161 9319070

Edinbra

I rang the ISA helpline as suggested. As this was the first time I'd made such an error they said to keep both ISA's and not do it again! Just to say I'm only around £400 over the total annual limit so it's not quite on the scale of Nick Leeson.
Anyway, thanks to all who answered and assisted me out of my pickle.
An honourable mention in my will is assured.
Best wishes,
Ken