Incorrect payment into Junior cash ISA

edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
3 replies 1K views
Saiidy007Saiidy007 Forumite
1 Post
edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
I wondered if anyone could provide advice on an issue that still needs resolving.
Set up a standing order a year ago to transfer funds into my daughter's junior cash ISA with the Coventry BS. My Dad had closed a kids saver account that he had set up for her and transferred £1450 to me. Whilst I was waiting for the money to leave my bank account I set up a monthly SO but failed to cancel the original SO (which was set to annual frequency). Thus, a year later the same amount was taken from my bank account. This was not supposed to happen.

When I realised what had happened I contacted the Coventry BS. They informed me that it was a matter for HMRC and that they can only return payments made in error if HMRC provide authorisation. Consequently, I spoke with HMRC (via the 0300 200 3300) who stated that they do not need to provide authorisation and told me to go and speak to the Coventry again. This happened a further 3 times with me not getting anywhere as both parties failed to budge and I was stuck in the middle with no idea how to get my money back. I went on the gov.co.uk website and it all seems quite vague on whether it is possible to get the money returned to me.

I have contacted my own bank to see if they can recoup the money as a 'payment in error' but they have said it is unlikely as it will be perceived as a 'gift'! I am still waiting for them to get back to me.
I don't know what to do as I cannot afford to lose that sum of money; I am struggling to get anyone who can help me. Please help!!!

Replies

  • eskbankereskbanker Forumite
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    Once money has been paid into a JISA, there are only a very small number of circumstances under which this can be undone prior to the child reaching 18, essentially if it's invalid (e.g. exceeding subscription limit) or if the account needs to be closed in the event of terminal illness.

    It doesn't sound to me like there are any such grounds to declare it invalid - have you found anything in https://www.gov.uk/guidance/repair-a-junior-isa-and-manage-account-holders-subscriptions that suggests that the subscription could be reversed?

    Unfortunately, wording such as
    It must be made clear to the person subscribing that the amount subscribed is a gift to the child, and as such cannot be repaid to the subscriber if at a later date the subscriber changes their mind.
    and
    Once a subscription is made to a JISA, the cash, and any investments bought with the cash, are beneficially owned by the child. The subscriber cannot recover their subscription, which they have confirmed is a gift to the child.
    doesn't seem particularly ambiguous to me....
  • Tom99Tom99 Forumite
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    Just stop the monthly standing order for a year?
  • AlexlandAlexland Forumite
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    https://www.gov.uk/guidance/close-void-or-withdraw-investments-from-a-junior-isa-as-an-isa-manager#request-to-reverse-jisa-subscription

    This suggests customer error subsciptions can only be reversed if they are over the annual limit or accidentally put into an unconnected child account. I agree with Tom99 that it's probably best to accept your error and stop making further monthly contributions for a while until you are back to where you wanted to be.

    If this causes you cashflow issues in the meantime then consider your options.

    Alex
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