Why is there tax deducted from my ISA?

savetilibleed

I have a 2 year FR Major ISA with Santander. I just looked now to see an interest payment on 2 May of £32.09 after £8.02 tax deducted? Why? It's a tax free account? It was funded by a transfer on 19 March from another BS. Confused.:(

And I'm sick of trying to sort out problems with Santander. :mad:

Crabman

The £8.02 tax deducted represents 20% of the original £40.11 interest.

I guess the obvious question is whether your money is actually in an ISA account?

If the account is definitely showing up as an ISA, I'd submit a query to Santander to ask why tax was deducted from a tax-free account.

le_loup

savetilibleed wrote: »

And I'm sick of trying to sort out problems with Santander. :mad:

You have been here long enough to have been warned about them.

Vortigern

Mine says "INTEREST PAID AFTER TAX 0.00 DEDUCTED" - It also says "FIXED RATE ISA" in the account name. :-)

evenasus

I forgot the interest would be paid on this account today.

I've checked mine and my husband's and they both read as Vortigern quoted.

dtaylor84

I too have a 2 year fixed rate major ISA with Santander, and had no tax deducted:

02/05/2012 INTEREST PAID AFTER TAX 0.00 DEDUCTED

savetilibleed

le_loup wrote: »

You have been here long enough to have been warned about them.

I know - I warned myself about it!
Have just got off the phone to Santander. Mistake (of course) which will be rectified. I have asked that they tell me my email, how such a mistake could happen for an ISA.

savetilibleed

Crabman wrote: »

The £8.02 tax deducted represents 20% of the original £40.11 interest.

I guess the obvious question is whether your money is actually in an ISA account?

If the account is definitely showing up as an ISA, I'd submit a query to Santander to ask why tax was deducted from a tax-free account.

Have done this today - asked for rectification and explanation. Amazing how they can do this! And definitely a Fixed Rate ISA.

Mikeyorks

Make sure that any correction is restored within the ISA. But if they offer you any compensation aditionally .... that will have to be outside the ISA.

savetilibleed

Mikeyorks wrote: »

Make sure that any correction is restored within the ISA. But if they offer you any compensation aditionally .... that will have to be outside the ISA.

Hmm good point! I'll see what the answer is when (if) it comes back. They said that would be in 5 days. Well see.

savetilibleed

Mikeyorks wrote: »

Make sure that any correction is restored within the ISA. But if they offer you any compensation aditionally .... that will have to be outside the ISA.

Crabman wrote: »

The £8.02 tax deducted represents 20% of the original £40.11 interest.

I guess the obvious question is whether your money is actually in an ISA account?

If the account is definitely showing up as an ISA, I'd submit a query to Santander to ask why tax was deducted from a tax-free account.

savetilibleed wrote: »

Have done this today - asked for rectification and explanation. Amazing how they can do this! And definitely a Fixed Rate ISA.

I got an email at around 10.45pm today (Saturday) to say my request has been processed. I looked online. It hadn't. Strangely the email was timed at 23.43.
Anyway I looked again 40mins and they have now corrected (added back the £8.02 missing) with no correction for anything that might have been lost in the 12 days (the transaction is dated 14 May, mistake was 2 May and I told them 3 May). I asked for an explanation - not got that. But 2 days ago I sent a Secure message as it had not been done asking for explanation so I better see a few days for that to happen (or not).