TWO ISA's in one year by mistake

blackgoldrealmoney

By mistake I have opened two ISA Stocks, and deposit in both. Altough, total amount is less than £10,000
What I need to do? Do I need to contact HMRC? Or Should I close both and start new ISA in next tax year, without messing things in the current year. Is this the big mistake I have made? I m thinking to close both ISAs & withdraw cash & deposit in one ISA in the next tax year. Will miss current year tax allowance.

eskbanker

You don't need to do anything - if HMRC want to do anything about it, they won't do so until after the end of the tax year, and they'd notify you of any action they plan to take.  They may determine that the second one you funded can't retain its tax-free status but it's also plausible that they'd take the view that a minor first time infraction isn't worth penalising, so unlikely to be worth doing anything yourself at this stage.

blackgoldrealmoney

Thanks for the reply. What will happen, if I close my both ISA for the current tax year & withdraw cash and don't avail current year allowance. and open, new ISA in the next tax year??

eskbanker

Nobody can say for sure what HMRC will do, but closing both doesn't actually change the fact that you paid into two, so IMHO not worth doing, especially when any action HMRC choose to take won't be punitive as such.

dunstonh

My guess is that HMRC will probably apply the get out jail free card in this scenario as the overall amount is less than £20k.  They usually allow one error per NI number providing the amounts are within the ISA allowance or within a reasonable tolerance.   

blackgoldrealmoney

What is 'get out jail free card' ... What does it mean ?

dunstonh

blackgoldrealmoney said:

What is 'get out jail free card' ... What does it mean ?

It means you use up your one time error allowance.

masonic

The first S&S ISA you contributed to in this tax year will be safe whatever HMRC decides to do. It is only the money paid into the second S&S ISA this tax year that is at risk.

blackgoldrealmoney

What's the risk to the second ISA? They will ask to close & withdraw cash? or anything else?

dunstonh

blackgoldrealmoney said:

What's the risk to the second ISA? They will ask to close & withdraw cash? or anything else?

Stop worrying about.  If you have not made a previous error then they will likely let it go with a warning.

masonic

blackgoldrealmoney said:

What's the risk to the second ISA? They will ask to close & withdraw cash? or anything else?

The risk would be that they treat it as a general investment account (you could then Bed&ISA it in another tax year), but as dunstonh states, it is unlikely they'd do that if it is your first offence and you have kept within the overall ISA allowance.