Santander - 2012 ISA

rusty_frog

I applied online to my bank, Santander, for an ISA using my 2012 entitlement before the cut off point in April 2013.
I also phoned them to confirm that all was in order and was assured that it was.
You can guess my annoyance to find that these funds were put in to year 2013.

They claim that this money cannot be put into 2012 because of HMRC rulings.
Santander have admitted liability as all calls are recorded.

This money was to be used for long term saving.
Santander have offered to confirm all calls etc in writing should I wish to use the Ombudsman service.

Am I wasting my time in trying to claim some for of compensation?

grumbler

I don't know what they have told you over a phone, but you should have deposited funds before the cut off point, not just applied. Have you?

rusty_frog

grumbler wrote: »

I don't know what they have told you over a phone, but you should have deposited funds before the cut off point, not just applied. Have you?

Perhaps I used the wrong term of phrase.
Funds were deposited and were accepted.
A clerical error on Santanders part placed them in to year 2013 rather than 2012 tax year.

JuicyJesus

rusty_frog wrote: »

Perhaps I used the wrong term of phrase.
Funds were deposited and were accepted.
A clerical error on Santanders part placed them in to year 2013 rather than 2012 tax year.

When exactly were the funds deposited, how were the funds deposited and how were they accepted?

If they were paid in as cleared funds before 6th April this year they should be in tax year 12/13. Period. Formal complaint, Ombudsman, done and dusted. If you deposited them on or after 6th April they will go into tax year 13/14 no matter what you or anyone else says.

rusty_frog

JuicyJesus wrote: »

When exactly were the funds deposited, how were the funds deposited and how were they accepted?

If they were paid in as cleared funds before 6th April this year they should be in tax year 12/13. Period. Formal complaint, Ombudsman, done and dusted. If you deposited them on or after 6th April they will go into tax year 13/14 no matter what you or anyone else says.

3rd April transfer from Santander current a/c.
Because of the closeness to the deadline, I phoned customer services to check that the transaction was made and within the time.
I was assured that it was.
Subsequent phone calls to Santander confirmed they did in fact receive and process my transfer, but, because of an error, the money was put into the tax year 2013.
In fairness, at no stage have Santander denied responsibility and have offered to confirm all in writing.
They have also offered £250 in compensation.
As stated initially, this was to be a long term investment.

Archi_Bald

So not sure why you would need to get Santander to confirm they 'received' your transfer - an internal transfer happens instantly.

But obviously something went wrong when you transferred money into your ISA.

Have you calculated what your financial loss is, due to the delayed crediting? On the face of it, £250 compensation sounds very generous but clearly it isn't just a couple of days of extra interest on your 2012/13 contribution -= - it would also impact your 2013/14 contribution. It would, however, most likely be difficult for you to prove you would have maxed your 2013/14 allowance, and also when you would have maxed it, and what the resulting interest lost would be because you would, effectively be denied the majority of your 2013/14 allowance.

£250 sounds a rather generous settlement offer - - unless you have credible figures that prove anything different, I would take the money they offered and move on.

And never leave ISA contributions to the last minute again in the future

JuicyJesus

£250 is very generous indeed, however I would still take it to the Ombudsman, since you have potentially lost a tax advantage as a result of their error as well as (potentially) extra interest on the money.

Although, it may be worth giving Santander a call to give them one final chance to modify their position. If they don't, Ombudsman.

JuicyJesus

Incidentally, Santander saying they can't correct it due to HMRC rules sounds like b*llocks to me. I'd also call HMRC to check,

grumbler

JuicyJesus wrote: »

£250 is very generous indeed,

Indeed - especially if you take the real value of the money into account. Normally even tax-free interest is just a fraction more than inflation.
Assuming £5K amount and 1% (very optimistic) real interest, it will take almost 5 years to earn £250.

And this is ignoring the interest that can be earned in a non-ISA account. It will probably take 20% taxpayer the entire life to make real £250 by saving 20% on the interest on £5K.

rb10

rusty_frog wrote: »

3rd April transfer from Santander current a/c.
Because of the closeness to the deadline, I phoned customer services to check that the transaction was made and within the time.
I was assured that it was.
Subsequent phone calls to Santander confirmed they did in fact receive and process my transfer, but, because of an error, the money was put into the tax year 2013.
In fairness, at no stage have Santander denied responsibility and have offered to confirm all in writing.
They have also offered £250 in compensation.
As stated initially, this was to be a long term investment.

Just for clarification, could you confirm what date shows on your current account statement next to the transaction, and what date shows on the ISA statement for the corresponding credit?

pqrdef

If an average interest rate in normal times is say 5%, then the tax break (at basic rate - other tax rates are available) is worth 1% a year, so £250 only covers 5 years. I'd be looking for 20 years, i.e. £1000.

Well seriously, a bank's first offer is never going to be generous is it.

However, I don't believe any HMRC rules prevent them from correcting a clerical error. In fact, I'm more inclined to think HMRC would insist on it being corrected. HMRC rules apply to actual transactions, not to incorrect records of transactions. Incorrect records are just incorrect records.

(Mystified as to how a clerical error gets into a payment thouigh.)