Accidentally paid into two cash ISAs

FTBAngst

Hi, I’m hoping someone can help me with this

I opened a help to buy ISA and cash ISA with nationwide (they let you split the cash allowance), totally approx 15.5k so far

This morning I transferred an existing ISA to the nationwide one. After I noticed something in my old ISA and found I’d actually paid approx £800 in in April (right at the beginning of the tax year). I called HMRC and they said I have to wait until the end of the tax year to see what happens. And I called nationwide who said if I move everything into one ISA HMRC might not notice and it might be ok but as they don’t make the rules they don’t know. HMRC said not to do anything with my accounts and just wait until the end of the tax year. It’s seems really punishing for me to pay tax on ALL my ISA allowance for one error in memory and that there’s no way for me to fix this now, despite raising it as soon as I realised. Is there anything I can do?

colsten

FTBAngst wrote: »

Is there anything I can do?

Yes. Relax. They won't take your entire tax wrapper away. But even if they did, you'd still have your Personal Savings Allowance of £1,000 if you are a BR tax payer, or £500 if you are a HR one. So unless you have very substantial unwrapped savings, your interest would still be tax free. But in all likelihood, they'll do nothing at all as it's a small amount of money. Please come back this time next year and let us know whether you heard any more about it from HMRC or from Nationwide.

FTBAngst

I’ve already used PSA on somewhere else

colsten

FTBAngst wrote: »

I’ve already used PSA on somewhere else

OK, so how much do you stand to have to pay, worst case? What interest do you get from £800 in an instant access ISA? £12 a year? More? Less? How much tax would you have to pay on £12? As I said: Relax.

If the matter gives you sleepless nights, you could read the Guidance Notes For ISA Managers which covers overpayments.

TheStoozeFather

I made a similar error a couple of years ago. I eventually got through to HMRC and was advised to wait. Nothing ever happened. I guess they have a good idea of genuine mistakes.

FTBAngst

colsten wrote: »

OK, so how much do you stand to have to pay, worst case? What interest do you get from £800 in an instant access ISA? £12 a year? More? Less? How much tax would you have to pay on £12? As I said: Relax.

If the matter gives you sleepless nights, you could read the Guidance Notes For ISA Managers which covers overpayments.

I’m concerned I’ll get interest on the entire “new” ISA amount (more than 800) and then have to pay tax on that.

FTBAngst

TheStoozeFather wrote: »

I made a similar error a couple of years ago. I eventually got through to HMRC and was advised to wait. Nothing ever happened. I guess they have a good idea of genuine mistakes.

That’s reassuring

colsten

FTBAngst wrote: »

I’m concerned I’ll get interest on the entire “new” ISA amount (more than 800) and then have to pay tax on that.

I think your concerns are entirely unfounded. Read the guide I sent a link for. As you have now consolidated your ISAs, I reckon it will count as a self repair, and you won't ever hear anything. If it's not self repair, the ISA Manager can repair it if HMRC ask them to - - - which I consider most unlikely in this case.

BTW, reading back over the OP, I now understand that you haven't actually exceeded your ISA allowance for the current tax year. So the issue of tax on excess subscriptions doesn't even occur (unless you mess up again before April 6 - but that won't happen now, will it ).

I can only say again: relax.

FTBAngst

colsten wrote: »

I think your concerns are entirely unfounded. Read the guide I sent a link for. As you have now consolidated your ISAs, I reckon it will count as a self repair, and you won't ever hear anything. If it's not self repair, the ISA Manager can repair it if HMRC ask them to - - - which I consider most unlikely in this case.

BTW, reading back over the OP, I now understand that you haven't actually exceeded your ISA allowance for the current tax year. So the issue of tax on excess subscriptions doesn't even occur (unless you mess up again before April 6 - but that won't happen now, will it ).

I can only say again: relax.

No! I’ve made MANY notes about the ISA limit.

Thanks