Taxed on our ISA's!

Reaper

The bank is talking rubbish, she does NOT fill in an R85 for an ISA.

An R85 is used to get non-ISA interest tax free. They don't apply to mini cash ISAs because they are already tax free.

Time to demand to speak to somebody at the bank who knows what they are talking about.

EDIT: I just had a thought. Did you apply at the last moment right at the end of the year? If so perhaps they opened it late at the start of the following tax year and it then clashed with your next ISA? A long shot I know...

Dunscrimpin

Hi Reaper,

No, we usually get things sorted out quite early into the new tax year, with the occasional transaction part way through, but nowhere near the last minute to my recollection, although I will check this out.

Many thanks for your help.

I'm just trying to find the quickest way to rectify the situation, and who to apply to in achieving this, whilst hopefully making sure it doesn't happen again.

I also thought people should be aware of what has happened, and check their own statements. Surely, we can't be the only couple in the UK, that this has happened to!?!

Regards,

D.

Mikeyorks

Dunscrimpin wrote: »

Does this assist in clarifying?

Not a lot Other than you've clarified it's Halifax ... bless them! I have seen this reported before .... but it goes back a couple of years, wasn't Halifax ... and the Bank admitted fault.

Trust they didn't ask for the R85? As it's obviously not applicable to an ISA .... but nor is deducting tax from one that's within T&Cs.

Firstly you need to identify exactly why the tax was deducted .. all else flows from that. Don't go to your Branch ..... ring them on the Savings / Isa helpline ( 08457 26 36 46) and get a definitive. If it's an error - then ask they refund the money direct to your ISAs.

It can't be interest ..... therefore you can't claim it back from HMRC !!! They need to treat it as 'money deducted in error' ...... and refund it (original date in order compounding not affected) to your ISAs. They're allowed to do that under the ISA guidance (which obviously doesn't mention deducting interest in error ... as it shouldn't happen). Edited extract below .... the fact that it's a 'closed' tax year is irrelevant :

10.31b Cash withdrawn from an ISA in error by the manager may be reinstated without reference to SSO where the investor - or the investor’s agent - gave the manager clear instructions and the manager misinterpreted these instructions and

•

withdrew money from (or closed) the investor’s ISA in error.

Managers should retain evidence justifying their decision to reinstate cash withdrawn from an ISA in error without reference to SSO with the investor’s ISA records and make them available at the next audit to the HMRC auditor.

If they admit error .... but say they can't refund .... contact HMRC on their ISA helpline (0845 604 1701) ..... and get them to instruct Halifax.

opinions4u

Something particularly odd has happened here.

If you don't believe that the branch is able to resolve your query I would invoke the complaints procedure.

I'm assuming it's Halifax that you hold the accounts with and, despite far too many years of having worked for them, the situation you describe is something I never saw.

There were one or two ways that ISAs could fall out of the system, but I never saw one taxed. I did see them occasionally redesignated to Liquid Gold and txed, but by that stage they were not ISAs.

Their web site says:

Where you first make your complaint

We aim to resolve your concerns within 24 hours. Sometimes it may take longer to look into the matter fully. If this happens, we will let you know within 5 working days who will reply.




Often the people you first raise the matter with are able to help, but there may be occasions when a specialist area needs to be involved. If you don't know who to contact, you can:

• Telephone Customer Relations on 08457 25 35 19*
• [FONT=Arial, Helvetica]Contact us using Textphone if you have a hearing impairment on 08456 00 17 50*
• [FONT=Arial, Helvetica]Write to us at:[/FONT] [FONT=Arial, Helvetica]Halifax, Customer Relations, PO Box 548, Leeds LS1 1WU[/FONT]

[/FONT]I'd call and challenge them to solve it within their 24 hour objective!



Please post the outcome - hopefully there is some completely logical explanation and it can be easily resolved for you.

Dunscrimpin

Hi Mikeyorks,

Bang on the money, re your synopsis.

Looking like I've got a clearing path to a solution, now!

Any further input much appreciated, and this shows that MSE site muscle is indeed mighty and far reaching!

Cheers,

D.

Dunscrimpin

Hi O4U,

You have just joined the " Thanked " team.

Again, the more input, the smarter my eventual case will be.

Cheers,

D.

Mikeyorks

Meant to ask ....... do the Interest Certificates clearly show these as ISAs??

It's only a print program ..... but I would have thought the extraction process (which creates the print files) might have baulked at the unusual task of showing interest deducted!

Dunscrimpin

Yeah, quite clearly shown as named ISA Accounts!

Down almost £400 between us!

11 year old son taxed in error as well, on his Save4it Account!

Plus, my wife, non-tax payer, taxed on her Instant Saver Account in both 2007-2008 and 2008-2009.

We've completed all the tax form, NI requests, personal ID info etc., and made dozens of joint visits to the local branch, confirming and reconfirming all the details.

Also discovered that the bank have a " Magic " trip number for total Direct Debits ( present and past ones all count towards this ). Once the trip number is hit, no more DD's can be allocated to that account. It has cost me interest from the bank failing to set up a DD to a credit card company, upon the trip number first being hit. It took quite a bit of investigating, phone calls, branch visits etc. before the bank acknowledged the existence of the problem in writing. They then set up a second current account, and I had to have all my current DD's transferred to it, with all the fuss involved in making sure that these were all honoured in time, when the switch over occurred. Still waiting for my money back, in terms of interest charged by the credit card company, after well over a year of reporting it as an official complaint, and the bank saying they would compensate me! No mention of covering all our related expenses, and lost interest on the money that should have been in our account, instead of paying charges with the credit card company. Still dragging on, and now we have to go all the way back to the start, as the bank can't find the records of what happened initially!

D.

[Deleted User]

Hi,

eh, it all seems to be pretty shambolic, I would be thinking of moving everything, even when you get things sorted out, and even though it is a bit of a nuisance.

Good luck.

webmasterpolo

Biggles wrote: »

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.

For a stocks and shares ISA it's actually what's called a 10% tax credit. Which is basically they take 10% tax off you. A few years back this could be reclaimed from the HMRC on your behalf, but Gordon Brown closed that option.

You cash ISAs shouldn't of had any tax removed assuming they are well within the limits, time periods etcs. I wouldn't worry too much, talk to the HMRC and explain, send them copies of statements if necessary (keep your originals). At the same time complain to Halifax. Aim for a HMRC tax refund plus some good will from Halifax over and above the lost interest while waiting for the refund.

Once it is all sorted I'd start moving your accounts away to someone else. I bank with the Co-operative, and they offer me excellent service, and they were ranked number 1 for customer service on the high street by Which. Plus you can use your local post office to pay in cheques and cash etc if you want to.

-Web