Exceeding a Cash ISA limit

vinnyvinny

Hi all.

I have only just realised i have gone over my yearly Cash ISA with Barclays. My last deposit was just after Christmas, while i was at the branch, i noticed the cashier was looking at something and was taking longer than usual, i ask if there was a problem in which her reply was no.....no... it's all done for you. Before asking if i had considered Bond Savings.

Just now i have added up my receipts for this year and realised i have exceeded the limit by approx £300. What are the implications of this? (if any?)

I just wish the cashier would have said something and i would have put in enough to meet the limit.

MoneySaverLog

vinnyvinny wrote: »

i have exceeded the limit by approx £300. What are the implications of this? (if any?)

The tax man will probably write to you to tell you about the error and not to do it again.

vinnyvinny

so will i be penalised on any interest gained or anything like that?

lisyloo

so will i be penalised on any interest gained or anything like that?

Well theorectically you should pay the income tax on the interest on the extra £300.

But I wouldn't call that being penalised, that's just paying your proper tax bill.

I'd expect them to want the tax but not charge you with any offence.

vinnyvinny

thanks, that what i also assumed, but i didn't know if there was a small print catch to these kind of things

lisyloo

Penalty charges without a criminal conviction would send the wrong message.
Tax evasion is a considered very serious offence and 100% not allowed.
Putting charges on misdemeanours would send the wrong message that it's allowable up to a point and it would blurr what's acceptable and what's not.

Let me draw a parallel with shoft-lilfting or physical violence (or any crime you care to think of).
You cannot have an acceptable level.

I believe you would only get fined if you were actually convicted of tax evasion.

dunstonh

Every NI number has a get of jail free card for minor rule breaches on ISAs. Exceeding it once generally results in the HMRC sending you a don't do it again letter and using up the card.

pinkdalek

To be honest I am surprised the bank hasn't picked up on this and returned the surplus to you or paid to another account you hold with them.

lisyloo

To be honest I am surprised the bank hasn't picked up on this

I'm not - they are generally pretty poor on this especially if you transfer mid-year.
If you transfer by and large they have no idea what you've already paid in.
This year I got asked on my transfer but from memory it's the first time.
Even with the same bank, I've had it be inaccurate.

I'm sure some banks do it and return the surplus but I wouldn't rely on their systems.

vinnyvinny

pinkdalek wrote: »

To be honest I am surprised the bank hasn't picked up on this and returned the surplus to you or paid to another account you hold with them.

The thing is the Cashier at the time obviously knew as she spent ages looking at something on her screen, so much so i asked if there was a problem. I know i should have taken more care or should have checked before depositing money, but i also feel she could have notified me that i was going to go over the limit. How annoying. I don't mind a warning letter as such, but if it is anything more then i will just close my account and move elsewhere.

Thanks for all the replies!

jamesd

The bank is supposed to have systems in place to prevent over-subscribing if it's to one account.