Paid into 2 Cash ISA's in same year

Johnboy60

Can anyone help!

I have been trying to contact HMRC regarding payments into 2 Isa’s in same year.

Have tried 2 phone numbers but all say I am contacting the wrong department.

0300 200 3312
0300 200 3300


I opened a new Isa this year 2019/20 with Coventry B.S
Have paid in 3 payments which total £4000
Also transferred in an old Isa from 2017/18


My 2018/19 Isa was with Sainsbury’s bank which was opened June 2018 to June 2019.


Whilst making another payment for this year’s allowance I picked the wrong bank and put it into last year’s account (Sainsbury’s)

Situation now is I have put £4000 into Coventry account & another new payment into Sainsbury’s account for this year’s allocation.
What do I need to do to rectify this and make it correct for HMRC rules?

Have contacted both Banks and they told me to contact HMRC and they will sort it.


Best Regards
Johnboy60

masonic

There are a number of options that should resolve this issue, but a lot depends on whether the ISAs you hold are fixed or easy access. You could (in order of preference/likelihood of success):

1) Request an ISA transfer of the current year subscriptions in full from the Sainsbury's ISA to the Coventry ISA as soon as possible.
2) Let HMRC deal with it when they find out next year. They may instruct Sainsbury's to remove the payment. You would want to avoid exceeding the overall £20k limit, but could top up the Coventry ISA which is your valid cash ISA for the 2019/20 tax year.
3) Make a flexible withdrawal from the Coventry ISA of the full £4000 paid in this tax year and instead use Sainsbury's as your cash ISA for the 2019/20 tax year

Johnboy60

Thanks for the assistance.

Option 1
Does this mean transfer the last payment i made into the sainsburys account
or transfer the whole account

Have you any update or help on the HMRC numbers.
Spent 2 hrs yesterday contacting the numbers in first message but told twice i was in the wrong dept.
do you know of any email contact for HMRC

masonic

Johnboy60 wrote: »

Thanks for the assistance.

Option 1
Does this mean transfer the last payment i made into the sainsburys account
or transfer the whole account

This means tick the box saying something along the lines of 'transfer current year subscriptions (in full) plus interest'

It is up to you whether you want to go beyond that and transfer all or part of the money paid in during previous tax years. It won't have any bearing on the situation you are in whether you do or do not.

Have you any update or help on the HMRC numbers.
Spent 2 hrs yesterday contacting the numbers in first message but told twice i was in the wrong dept.
do you know of any email contact for HMRC

I doubt you will get anywhere with HMRC. Their standard advice is "wait for us to contact you in due course", which means after the end of the tax year in which the problem arose.

Johnboy60

Thank you Masonic for your advise.

Reed_Richards

An option not suggested by Masonic would be to tell Sainsburys that you made a mistake and ask them to remit your contribution back to you. This cuts out the "middle man" of HMRC.

Be careful. There was a recent thread (which unfortunately I cannot find) where someone tried to undo a mistake by making a withdrawal, then had the money sent back by the ISA provider so the withdrawal was deemed to be a withdrawal of funds from the previous years ISA and could not be put back.

grumiofoundation

Reed_Richards wrote: »

An option not suggested by Masonic would be to tell Sainsburys that you made a mistake and ask them to remit your contribution back to you. This cuts out the "middle man" of HMRC.

Be careful. There was a recent thread (which unfortunately I cannot find) where someone tried to undo a mistake by making a withdrawal, then had the money sent back by the ISA provider so the withdrawal was deemed to be a withdrawal of funds from the previous years ISA and could not be put back.

As above trying to “sort it out yourself” could create issues

Here is the thread I think you mean?
https://forums.moneysavingexpert.com/discussion/6036504

masonic

Reed_Richards wrote: »

An option not suggested by Masonic would be to tell Sainsburys that you made a mistake and ask them to remit your contribution back to you. This cuts out the "middle man" of HMRC.

Do providers actually play ball with this? I've not seen an instance where someone has approached their provider and been told anything other than to contact HMRC, or wait to be contacted by HMRC.

Providing the subscriptions to the provider's ISA(s) are valid, I was under the impression they were not at liberty to "cancel" a subscription without going through the standard ISA repair process (which requires HMRC to be in possession of the annual returns from the tax year in question). I'd be somewhat surprised if they could cancel subscriptions based on the assurances of the account holder that they had already subscribed to an ISA of the same type elsewhere.

Reed_Richards

masonic wrote: »

Providing the subscriptions to the provider's ISA(s) are valid, I was under the impression they were not at liberty to "cancel" a subscription without going through the standard ISA repair process (which requires HMRC to be in possession of the annual returns from the tax year in question). I'd be somewhat surprised if they could cancel subscriptions based on the assurances of the account holder that they had already subscribed to an ISA of the same type elsewhere.

So if you told an ISA provider you made an invalid subscription they would, in effect, not believe you? Even if it is an easy access ISA where you are perfectly at liberty to withdraw the money? And would they prevent you from following option 1 (ISA transfer to the correct provider) if they knew the subscription was invalid? Honesty might just be the best policy.

masonic

Reed_Richards wrote: »

So if you told an ISA provider you made an invalid subscription they would, in effect, not believe you?

Whether they believe you or not, they don't have the ability to check and therefore would not and should not act without being able to verify what they are doing is appropriate. HMRC would no doubt take a very dim view of a provider who was party to a customer fraudulently recovering their ISA allowance by lying about making an invalid subscription so that they could use it elsewhere, or lying about the order in which they subscribed to ISAs so that they could keep the one they favoured rather than the first one they subscribed to.

That's probably why HMRC requires ISA managers to police their own ISAs, but leave the policing of problems involving more than ISA managers to their own compliance team. It is why HMRC have a process that is followed to identify and resolve such problems when they arise, which involves obtaining annual returns from all ISA managers after the end of the tax year and checking the subscriptions made by each individual.

It's probably also why in all accounts of people in this situation who have contacted their provider for help, the provider has asked the individual to contact HMRC or wait for HMRC to contact them in due course, rather than take any action themselves, just as has happened in this thread.

Even if it is an easy access ISA where you are perfectly at liberty to withdraw the money?

It makes no difference whether the ISA is easy access or fixed rate. When you withdraw from an ISA, it doesn't change the amount subscribed to that ISA, unless the ISA is flexible. If the ISA is flexible, then this can be a resolution, but the Sainsbury's ISA is not flexible in this case.

And would they prevent you from following option 1 (ISA transfer to the correct provider) if they knew the subscription was invalid?

The receiving provider may refuse to accept the transfer of current year subscriptions from an ISA of the same type while also holding current year subscriptions - that would leave the OP in the same situation he's in now, with two options remaining. Unlikely IMHO, but possible.

There are a couple of variations on Option 1 that would eliminate this slight risk. The first of which I was originally going to post above, but decided against it as it was considerably more work:

Option 2a: Transfer the Sainsbury's ISA to a different type of ISA with a new provider (S&S or IF), then transfer to Coventry.
Option 2b: Transfer the Sainsbury's ISA to a flexible ISA with a new provider (of any type), then flexibly withdraw the full balance of the account and close it.

Honesty might just be the best policy.

Yes I wouldn't advocate doing anything that is dishonest, but I don't think any dishonesty is being advocated by anyone.

"Have contacted both Banks and they told me to contact HMRC and they will sort it."

So both banks have been informed. The OP has also attempted to inform HMRC directly, but has been unable to get through. Others who have done so successfully have just been told to sit tight and an assessment will be done after the end of the tax year and they will be contacted if there are any issues or any action needs to be taken.

This thread is about what the OP can do himself to rectify the error. I certainly wouldn't consider it "dishonest" to work within the ISA rules to rectify the error.

t0rt0ise

Advice in this article is to "sit tight and expect contact".

https://www.telegraph.co.uk/finance/personalfinance/savings/12018474/I-paid-into-two-cash-Isas-by-mistake.-What-should-I-do.html