ISA (Also withrew money by mistake!)

edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
21 replies 1.4K views
ironman1ironman1 Forumite
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edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
First of all I have an ISA with Halifax and we access it online. We only started it in April and put the £3600 in there. Earlier this week I tried to see if I could put more in and it let me top it up to £5000 which seemed strange?!

It is only 3% so i was wondering who we could go to that offers a better rate, if any?

Also by mistake, while trying to top it up online I accidently withrew £300 into another online savings account instead of adding to it, does this mean we can no longer use that £300 allowance? I put it straight back and it accepted, I dont know whats going on!
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Replies

  • opinions4uopinions4u
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    ironman1 wrote: »
    First of all I have an ISA with Halifax and we access it online. We only started it in April and put the £3600 in there. Earlier this week I tried to see if I could put more in and it let me top it up to £5000 which seemed strange?!
    If you're over 50 on 5th April 2010 then you can top up to £5,100. If you're under 50 then you've broken the ISA regulations.
    It is only 3% so i was wondering who we could go to that offers a better rate, if any?
    If it's the ISA Direct Reward your 3% rate allowing 4 withdrawals is pretty good. If you want a higher rate you probably need to fix. Halifax at 3.75% is one of the better 2 year fixed rate ISA deals out there, but doesn't allow access.
    Also by mistake, while trying to top it up online I accidently withrew £300 into another online savings account instead of adding to it, does this mean we can no longer use that £300 allowance?
    You shouldn't be able to use that part of the allowance again.
    I put it straight back and it accepted, I dont know whats going on!
    Tell us all the dates and amounts that you have paid in this year, and also confirm which side of 50 you will be on 5th April 2010.
  • turbobobturbobob Forumite
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    Started in April in the last tax year (08-09) or this one (09-10)? The changeover is the 5th April. If you subscribed the £3600 in the last tax year, then you are free to add up to £3600 in this tax year. From 6 October 2009 the cash ISA limit increased to £5100 for over 50's.

    I'm not sure about mistakenly withdrawing money. Perhaps someone else has experience of this.
  • BaldurBaldur Forumite
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    turbobob wrote: »
    I'm not sure about mistakenly withdrawing money. Perhaps someone else has experience of this.
    See http://www.hmrc.gov.uk/ISA/isa-guidance-notes-2008.pdf
    Cash withdrawn from an ISA in error
    10.31a Cash withdrawn from an ISA in error by the investor cannot be reinstated.
  • edited 29 October 2009 at 3:10PM
    KingLKingL Forumite
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    edited 29 October 2009 at 3:10PM
    Are you over 50? If so, the tax man would let you add (£5100-£3600) another £1500 up to a total of £5100.

    If you withdrew £300, then no you aren't allowed to add it back in. If you are over 50 and have paid £5000 in, then tried to pay the £300 "back in" you have overstepped your allowance by £200 and you are in trouble.

    If you are under 50, you have overstepped your allowance by (5000-3600+300) £1700 and you are in trouble.

    The official line is that you should contaact HMRC and declare your c0ck-up. 0845 604 1701 (linky)



    3% is an OK rate, but you can get a list of current best buys here

    edit: I must learn to type faster!!

    .

  • ironman1ironman1 Forumite
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    I am only 23.

    I wasn't aware i'd broken any rules. i keep seeing £5,100 being mentioned so tried to add more to my ISA. usually it says 'cannot add more funds at the moment' or something. This time it accepted the money.

    By 'breaking the rules' are you saying I could actually get in trouble over this? Surely thats laughable
  • lisyloolisyloo Forumite
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    Why it is laughable?

    Ignorance is not a defence in tax matters.
    It's up to you to take responsibility.

    These are not my own views, I'm putting forward the views of the tax/legal system.

    You can't get an ISA without signing a declaration, so you can't even claim ignorance.

    I've just transferred my own ISA and my bank have made a mistake (it says £1800 deposited this year and not £3600).
    If I took advantage of a bank error dishonestly then I'd be guilty.
    The fact that there's a bank error doesn't stop me being guilty.
  • KingLKingL Forumite
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    You need to contact HMRC. Chances are, they will just make arrangements that the amount over £3600 will be taxable.

    The banks systems won't necessary police the HMRC rules.

  • ironman1ironman1 Forumite
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    I had an ISA opened in 2007 with Abbey. I added the £3600 then last year added the other £3600 I was allowed for that tax year.

    Late last year I withrew the lot to pay towards our deposit on our first home. Earlier this year (April) I opened another ISA with Halifax. I added £3600 to it. Earlier this week I topped it up to £5000 as I thought I might be due a 'top up'.

    It let me do this...
  • ironman1ironman1 Forumite
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    It usually says 'amount you can deposit' and had £0 next to it. That has now gone so I thought I could add more. Usually if I've tried to add more in the past it doesn't let me as I have used my allowance.

    I have had two different ISA's (at different times) with two different banks, so i wasn't and still aren't aware if I can add more or less.
  • KingLKingL Forumite
    1.7K Posts
    Under HMRC regulations, you can deposit £3600 each year. You have broken the rules and now you need to fix it.

    You can complain to Halifax if you think their systems aren't up to scratch, but the HMRC rules are immutable. .

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