Paid too much into ISA

purplestar133

masonic wrote: »

Well, they'll either fix it or they won't. Based on people's experiences here, HMRC always seem to let you get away with the first offence. It would just be a shame if yours was only for such a small sum - you'd be much better off if you got let off a £3600 oversubscription!

What is supposed to happen is if you make an oversubscription like this, the interest earned in the account becomes taxable from the date of the mistake until either you or HMRC notify the ISA provider and they then take steps to repair the account and restore its tax-free status.

Is it all the interest earned, or just the interest earned on the £1.38 that I oversubscribed that becomes taxable? Grrr...I hope Egg restore the tax-free status and don't just say "everything's ok..." which the lady I spoke to was saying, even though she didn't understand what the problem was.

purplestar133

Lokolo wrote: »

To be fair I can see the womans point. Egg have a limit each tax year that won't let you put more money into it. My friend had £2,999 in last year but it wouldn't let him get to £3,000. I guess there was a slight programming problem. However they overuled it and put in £1 for him.

The woman was trying to work out what I'd paid in each year and told me I'd paid more than my £3000 in last year, which wasn't the case, the extra was the interest. I felt a little bit like I was telling her how it works, and I know how much I've paid in when. She was trying to tell me the payment's gone through so it's ok and I had to say "well, it's what the HMRC will do that worries me". I'm sure she was doing her best, but it just doesn't make me feel very confident about the handling of my account.

masonic

purplestar133 wrote: »

Is it all the interest earned, or just the interest earned on the £1.38 that I oversubscribed that becomes taxable? Grrr...I hope Egg restore the tax-free status and don't just say "everything's ok..." which the lady I spoke to was saying, even though she didn't understand what the problem was.

It would be all of the interest earned during that time, but it's HMRC's decision whether or not any action needs to be taken, and they've pretty much told you that it won't this time. If Egg correct the mistake, then HMRC will never know you did anything wrong; if they don't, then HMRC will let you off for a first offence anyway.

It sounds as though when you spoke to Egg, you were just unlucky and spoke to someone who wasn't very clued-up. If the matters been passed on, you'll probably get a much better follow-up.

Lokolo

purplestar133 wrote: »

The woman was trying to work out what I'd paid in each year and told me I'd paid more than my £3000 in last year, which wasn't the case, the extra was the interest. I felt a little bit like I was telling her how it works, and I know how much I've paid in when. She was trying to tell me the payment's gone through so it's ok and I had to say "well, it's what the HMRC will do that worries me". I'm sure she was doing her best, but it just doesn't make me feel very confident about the handling of my account.

Thats why this site exists. But not all bank employees are like that! Just say that to natweststaffmember ldavies and ShelfStacker!

purplestar133

Lokolo wrote: »

Thats why this site exists. But not all bank employees are like that! Just say that to natweststaffmember ldavies and ShelfStacker!

Thanks Masonic - makes sense to me now! :rolleyes:

Lokolo, yes I know, it's the luck of the draw who you get! And this site is a god-send for my confidence with these things, I actually find out some real information that is trustworthy when I post questions on here!

Mikeyorks

The normal 'overpayment' is because someone makes payment to separate providers in the one year. So the individual providers are unaware, until HMRC aggregate your figures well after the year end.

But .....HMRC require individual providers to have systems in place to prevent overpayments within the same institution (and under the same NINO). Looks like Egg fail the test? They should bounce the excess back to you - but other than that the ISA and its status remain undisturbed.

HMRC won't have made any notes (you will have judged that from the conversation with them) .... so you just forget about it. If Egg don't undo the overpayment - just regret you didn't make it larger!

purplestar133

Mikeyorks wrote: »

The normal 'overpayment' is because someone makes payment to separate providers in the one year. So the individual providers are unaware, until HMRC aggregate your figures well after the year end.

But .....HMRC require individual providers to have systems in place to prevent overpayments within the same institution (and under the same NINO). Looks like Egg fail the test? They should bounce the excess back to you - but other than that the ISA and its status remain undisturbed.

HMRC won't have made any notes (you will have judged that from the conversation with them) .... so you just forget about it. If Egg don't undo the overpayment - just regret you didn't make it larger!

Thanks mikeyorks, that's very reassuring!