Bank has taxed our ISA's!

Dunscrimpin

Taxed on our ISA's!
Hello,

My wife and I have both had substantial amounts of income tax deducted by our bank, in relation to our separate, and differently named ISA accounts for the tax year 2008/2009.

We presume that there are no circumstances under which this can be legal.

I am not a big earner, and my wife is a fulltime mum.

Has anyone experienced this before, and if so, can you please advise on the best course of action?

The local bank staff said they had never seen this before, and only believed us on production of our Income Tax Certificates, as prepared by the bank themselves. They say we will have to apply to HMRC to get our money back.

Would we be due compensation for loss of interest on our erroneously deducted interest?

The same bank has taxed my son's ( now 11 years old ) savings account in 2007-2008, but not in 2008-2009, when there was more money in the account.

Finally, my wife is a non-tax payer, and her Instant Saver account has been taxed in both 2007-2008 and 2008-2009.

Any assistance much appreciated.

Regards,

D.

natweststaffmember

On your wife's account: was a R105 tax form completed?
For your son's account, was the account in his name or your wife re the child?
If it was in the son's name was an R85 completed?

Can you confirm that the ISA was a mini CASH ISA and not a Maxi ISA(ie stocks and shares plus cash)?

Dunscrimpin

All tax forms filled in at branch, as far as I am aware, or completed and returned accordingly.

My son's account bears both my wife's and my name, along with his, as does the completed Confirmation of Registration for Gross Interest ( UK ) form.

My younger son ( 8 ) has exactly the same account, and has not been charged any tax.

A Save4it Account is topped up each year from a Regular Saver Account. It is the Save4it Account which has been taxed.

Does this assist in explaining things?

Regards,

D.

dunstonh

When did you sign the R85 for that account?

the form deals with current and future tax years but not past tax years.

Also, if the account was opened after the R85s were completed (including any possible account transfer if you changed the type of account) then a new R85 would be required. They couldnt use the old ones.

My wife and I have both had substantial amounts of income tax deducted by our bank, in relation to our separate, and differently named ISA accounts for the tax year 2008/2009.

Are they cash ISAs or stocks and share ISAs? Did the ISA product have a period when it wasnt an ISA (e.g. an amount was above the isa allowance and was moved in after the tax year start in a transaction known as "bed & ISA")?

Dunscrimpin

R85 completed after opening of account, and submitted in March 2004.

Accounts ( Mine an ISA Direct Reward Account. My wife's an ISA Saver. ) both opened in local branch as standard Mini Cash ISA's.

All transactions carefully kept within the relevant tax year's maximum allocation amount, and made as one off payments in that year, rather than a series of payments over the relevant tax year.

No left field element whatsoever, in other words.

Tax only charged in 2008-2009 period, with no sign of any in previous years over which the account has existed.

Hope this clarifies the situation.

Regards,

D.

Comyface

Dunscrimpin wrote: »

Taxed on our ISA's!


The local bank staff said they had never seen this before, and only believed us on production of our Income Tax Certificates, as prepared by the bank themselves. They say we will have to apply to HMRC to get our money back.


QUOTE]

That can't be right, surely?
This needs to be looked into by the bank if it's the first year that you've been charged tax all of a sudden.
They should at least investigate why this has happened, not send you to HMRC to do the legwork yourselves.
I'd put it in writing to them, enclose a copy of the Tax certs, and ask them to credit you with the tax paid, backdated so you don't lose any compound interest.

The account names you mentioned make me think it's Halifax (or BoS).
Send a letter to their Customer Relations dept:

PO Box 548
Leeds
LS1 1WU.

Please come back and let us know how this happened/what they say.

Premier_2

Dunscrimpin wrote: »

...

Hope this clarifies the situation.

Regards,

D.

Completely.

Have you managed to contact your tax office yet, as advised by the bank, as it is HMRC not the bank that ultimately decides whether tax can not be deducted at source.

I'd start with the ISA first, as presumably you have interest added to the ISA so don't just want the tax back, but want it back within the ISA wrapper.

Perhaps how they propose to handle that (hopefully so you don't lose interest on the tax wrongly deducted at source either), will lead the way to a similar resolution to the issues you have with non-ISA products.

Mikeyorks

Bit confusing to have a duplicated thread?

http://forums.moneysavingexpert.com/showthread.html?t=2203213