Why is there tax deducted from my ISA?

le_loup

Look on your FULL statement on Monday and it will probably show a transaction date followed by an effective date.

Ultrasonic

I'm somewhat at a loss as to how even Santander could screw this up. I'm almost impressed by the incompetence.

The worrying thing is I guess the OP probably isn't the only customer affected, and not everyone is going to spot the error.

keiran

The other thing to watch out for with satander is with transferred ISAs.
They state they will pay interest from the day after the old provider stopped paying interest. But their systems/competence aren't up to this. I've been given an arbitrary interest amount which does not equate to any method - interest from date of old ISA closure, date of cheque being credited to the account, or date when cheque would have cleared. Just a made-up number!! ( obviously too low and the error in satander's favour)

I am, of course, pursuing this and would urge all customers who have transferred in ISAs to satander to check the interest credited on 2 May 2012. With a fixed rate and fixed balances, should be easy to work out

Ultrasonic

Thanks for the tip Kieran. I am in the process of transferring an ISA to Santander, although it probably won't be a fixed balance making it a bit of a faff to check their interest calculation (but I'll do it).

badger09

keiran wrote: »

The other thing to watch out for with satander is with transferred ISAs.
They state they will pay interest from the day after the old provider stopped paying interest. But their systems/competence isn't up to this. I've been given an arbitrary interest amount which does not equate to any method - interest from date of old ISA closure, date of cheque being credited to the account, or date when cheque would have cleared. Just a made-up number!! ( obviously too low and the error in satander's favour)

I am, of course, pursuing this and would urge all customers who have transferred in ISAs to satander to check the interest credited on 2 May 2012. With a fixed rate and fixed balances, should be easy to work out

I've already checked mine, on both an internal transfer of last year's Flexible ISA, and external from Nationwide into the 2 Year Major ISA. Total interest is correct and has been calculated from the day after it left Nationwide

Anthorn

A transfer to another ISA provider is treated as a withdrawal but the interest is still not taxable unless it is moved to a non-ISA account, i.e. an instant access savings account.

I'd say that Santander has made a mistake or they have a standard phrase which omits the tax rate.

savetilibleed

le_loup wrote: »

Look on your FULL statement on Monday and it will probably show a transaction date followed by an effective date.

Yes I'll do that thanks.

Ultrasonic wrote: »

I'm somewhat at a loss as to how even Santander could screw this up. I'm almost impressed by the incompetence.

The worrying thing is I guess the OP probably isn't the only customer affected, and not everyone is going to spot the error.

Yeh I wonder too if they'll do the same on the same date next year!

badger09 wrote: »

I've already checked mine, on both an internal transfer of last year's Flexible ISA, and external from Nationwide into the 2 Year Major ISA. Total interest is correct and has been calculated from the day after it left Nationwide

I checked mine as far as I was able and it seems the interest is not quite right. I seems there is 46 days interest when the previous ISA was closed for transfer at 48 days before the 2 May. Not too sure it's worth quibbling about at £1.70ish.

innovate

Anthorn wrote: »

A transfer to another ISA provider is treated as a withdrawal

It shouldn't be, it should be treated as an ISA transfer, which is very different to a withdrawal. With a withdrawal, all your money (capital + interest) loses its tax free status after it has been withdrawn. With an ISA transfer, all your money keeps the tax free status.

savetilibleed wrote: »

Not too sure it's worth quibbling about at £1.70ish.

I am in a similar situation, and I won't let them get away with it. It's the principle I am concerned about - a bank must be able to process interest payments correctly. It's their business to manage money correctly, after all.....

Gromitt

savetilibleed wrote: »

I checked mine as far as I was able and it seems the interest is not quite right. I seems there is 46 days interest when the previous ISA was closed for transfer at 48 days before the 2 May. Not too sure it's worth quibbling about at £1.70ish.

If they have done this to 600,000 other customers, guess how much extra cash they have made (it's more than £1 million).

You are owed it, push for it.

Ultrasonic

Gromitt wrote: »

If they have done this to 600,000 other customers, guess how much extra cash they have made (it's more than £1 million).

Surely the tax will have been paid to the Inland Revenue rather than Santander hanging on to it? Then again, they could have messed that up too and kept the cash I guess.