Overpaid by £900 into my stocks and shares ISA

superhanzzz77

ok so i messed up and overpaid into my stocks and shares ISA this year. Slightly annoyed that my broker let me do this.

bank have contacted me and said to phone the HRMC

has this happened to anyone?

any idea what action they will take?

ta

dtsazza

FAQ entry from the HMRC website:

Q. What if I pay too much money into my ISAs?
A. If, by mistake, you put more than £10,200 into your ISAs in a tax year, the excess payments are invalid, and you are not entitled to any tax relief on investments purchased with the excess payments.

You should not try to correct this mistake yourself. Instead, you should call the ISA Helpline and explain the problem to them. They will advise you what action you need to take.

I've never done this, so I can't tell you what the ISA Helpline will say - but at least phoning them is what your next step should be.

Feasible options would be that they instruct your bank to pay the money back out in a particular way, without accounting for the accrued interest; they consider it part of your next year's contribution allowance, and tell the bank not to pay interest on it until then; or they consider it part of your next year's allowance, and make you declare the interest as taxable to them.

The first two require HMRC to get the bank to do something special regarding the interest, so if I had to guess I'd expect they'll want you to do some sort of tax declaration to pay back tax on the extra £900. I can't imagine getting the figures right will be pretty, though.

tanith

When I did this by accident the bank informed HMRC so I just rang them too, they were very nice about it and it was corrected by the bank. HMRC told me they usually look at what you've done and if its obviously a mistake (first and only time its happened) then its not a biggy as long as its corrected you just get a letter telling you not to do it again..

jimjames

Depends on the broker - I noticed on the Alliance trust site they charge £100 penalty for breaking ISA rules.

Having said that I can't believe a broker has a system that allows you to pay in more than £10200 into your account as that is a fixed limit. If you have a cash ISA as well then unfortunately that is your fault for not checking the amount as no broker can know what is in your other accounts.

hcayley

yes it's my fault - I paid £5100 into a cash ISA at the beginning of the year and then £6000 into the SnS - stupid really

both with HSBC though so for some reason thought they would keep track

Sid_Harper

i did the same year twice - start and end of tax year - different providers so not picked up by them but HMRC, I can confirm, sent a letter saying we'll let you keep it tax free but don't do it again. Pretty good really!

superhanzzz77

Phoned them today...

First time they will just send a letter saying don't do it again!

I guess it's because you don't pay capital gains on shares until you've made over 10K so highly unlikely to have done that with £900!