Exceeded ISA Amount in 2019-20, now worried

[Deleted User]

Hi all,
Due to what I can only describe as a lack of knowledge, I ended up overpaying into two separate stocks and shares ISAs in tax year 2019-20, mainly as a result of depositing a lump sum into one from a savings account which took me over the allowance. I phoned the HMRC having realised this, and prepared myself for the consequences, as the advice online suggested not to close any account but to ask HMRC for advice. The reaction from the agent was that it was ok, and maybe I should inform the ISA provider. After some to-ing and fro-ing, he arranged a callback with a colleague by the end of the week since he couldn't advise me further. I just wondered what I should expect? I am prepared for the consequences, as long as I am doing the right thing by informing them, but also a little nervous. Thank you in advance.

eskbanker

Not always predictable what they'll do, especially without the full picture of scale of breach, etc, but their general approach is to deem the second subscription as invalid and treat it as taxable.  However, not unknown for them to turn a blind eye, but you've done the right thing liaising with them so just wait and see....

Ed-1

Deleted_User said:

Hi all,
Due to what I can only describe as a lack of knowledge, I ended up overpaying into two separate stocks and shares ISAs in tax year 2019-20, mainly as a result of depositing a lump sum into one from a savings account which took me over the allowance. I phoned the HMRC having realised this, and prepared myself for the consequences, as the advice online suggested not to close any account but to ask HMRC for advice. The reaction from the agent was that it was ok, and maybe I should inform the ISA provider. After some to-ing and fro-ing, he arranged a callback with a colleague by the end of the week since he couldn't advise me further. I just wondered what I should expect? I am prepared for the consequences, as long as I am doing the right thing by informing them, but also a little nervous. Thank you in advance.

It's at least 6 months behind bars for such an offence...

[Deleted User]

Please be joking.

dunstonh

HMRC have operated a policy of one get out of jail free card per NI number when it comes to making a mistake with ISA contributions.      So, there will be no penalty or issue for you to worry about if this is your first time.

Depending on the scale of the mistake.  HMRC will either issue a letter saying don't do it again or they will instruct the second ISA manager to remove the ISA status (so the investments are held unwrapped instead of in an ISA).

DO NOT WORRY.

[Deleted User]

dunstonh said:

HMRC have operated a policy of one get out of jail free card per NI number when it comes to making a mistake with ISA contributions.      So, there will be no penalty or issue for you to worry about if this is your first time.

Depending on the scale of the mistake.  HMRC will either issue a letter saying don't do it again or they will instruct the second ISA manager to remove the ISA status (so the investments are held unwrapped instead of in an ISA).

DO NOT WORRY.

Thank you so much, this is very reassuring. Funnily enough, I got a callback from HMRC today. The lady similarly stated that there is nothing for me to do - that I would receive a letter in the post if HMRC proceed with this. I was quite concerned when I realised this, but I feel reassured now!

Warslet

You have done the right thing in notifying HMRC. Now that you have a callback wait for any letter to arrive which will explain what you need to do.  You'll remember not to do it in the next tax year! 

[Deleted User]

Warslet said:

You have done the right thing in notifying HMRC. Now that you have a callback wait for any letter to arrive which will explain what you need to do.  You'll remember not to do it in the next tax year! 

Yes, the worry was a valuable lesson. I definitely won't be doing that knowingly! I guess I will await a letter for next steps but will be mindful of any transactions from now on!