ISA closed by provider, can I open another ?

buyhighselllow

Hi
I took out a cash ISA with Virgin a few weeks ago. They have now returned the money as I did not supply proof of identity in time ( despite being an existing customer) , with the few weeks  interest. Can I take out another cash isa this financial year ?

masonic

They should have cancelled it, in which case you would be eligible to open another. Have they not written to you with an explanation?

2010

You can open as many as you like but only pay new money into one each tax year.

wiseonesomeofthetime

2010 said:

You can open as many as you like but only pay new money into one each tax year.

This is why they've asked the question.

They subscribed to the Virgin ISA. Paid money in. Received their money back, plus interest, which would appear that they have "subscribed and paid new money" into an ISA for this tax year, and are so now prevented from opening another one, regardless of whether this year's is open or closed.

Can Virgin "cancel" it, as if it never existed, when they have paid out interest? 🤷‍♂️

2010

wiseonesomeofthetime said:

2010 said:

You can open as many as you like but only pay new money into one each tax year.

This is why they've asked the question.

They subscribed to the Virgin ISA. Paid money in. Received their money back, plus interest, which would appear that they have "subscribed and paid new money" into an ISA for this tax year, and are so now prevented from opening another one, regardless of whether this year's is open or closed.

Can Virgin "cancel" it, as if it never existed, when they have paid out interest? 🤷‍♂️

wiseonesomeofthetime said:

2010 said:

You can open as many as you like but only pay new money into one each tax year.

This is why they've asked the question.

They subscribed to the Virgin ISA. Paid money in. Received their money back, plus interest, which would appear that they have "subscribed and paid new money" into an ISA for this tax year, and are so now prevented from opening another one, regardless of whether this year's is open or closed.

Can Virgin "cancel" it, as if it never existed, when they have paid out interest? 🤷‍♂️

And I`ve answered it.

They didn`t say if the interest was from the ISA account that they didn`t open.
Virgin could have had it in a holding account.
The money`s been returned because the account wasn`t funded in time because of identity issues and therefore never opened.

The obvious answer is to phone Virgin up and ask what they are playing at and also raise a complaint and get £50 out of them.
Maybe the OP will let us know.

TheBanker

2010 said:

wiseonesomeofthetime said:

2010 said:

You can open as many as you like but only pay new money into one each tax year.

This is why they've asked the question.

They subscribed to the Virgin ISA. Paid money in. Received their money back, plus interest, which would appear that they have "subscribed and paid new money" into an ISA for this tax year, and are so now prevented from opening another one, regardless of whether this year's is open or closed.

Can Virgin "cancel" it, as if it never existed, when they have paid out interest? 🤷‍♂️

wiseonesomeofthetime said:

2010 said:

You can open as many as you like but only pay new money into one each tax year.

This is why they've asked the question.

They subscribed to the Virgin ISA. Paid money in. Received their money back, plus interest, which would appear that they have "subscribed and paid new money" into an ISA for this tax year, and are so now prevented from opening another one, regardless of whether this year's is open or closed.

Can Virgin "cancel" it, as if it never existed, when they have paid out interest? 🤷‍♂️

And I`ve answered it.

They didn`t say if the interest was from the ISA account that they didn`t open.
Virgin could have had it in a holding account.
The money`s been returned because the account wasn`t funded in time because of identity issues and therefore never opened.

The obvious answer is to phone Virgin up and ask what they are playing at and also raise a complaint and get £50 out of them.
Maybe the OP will let us know.

What would the complaint be about, when it appears Virgin asked for information to meet their legal and regulatory obligations to prevent financial crime, which the OP did not supply? 

The OP should indeed clarify with Virgin whether they are reporting the interest to HMRC as non-ISA interest. If they are (or if, unusually, they've deducted basic rate tax) then it was never in an ISA. If they're reporting it as an ISA subscription to HMRC then there will be a problem. 

masonic

It's irrelevant where the money was held while it was with Virgin, as a cancelled ISA is entitled to earn tax free interest while it was open. All that matters is whether or not it was cancelled. This is the crux of the OP's issue, and it cannot be answered by anyone other than Virgin. Even if Virgin has not followed the correct procedure, the OP would not be penalised by HMRC for opening and subscribing to a second cash ISA, as this would be treated as "investor error: self transfer".

buyhighselllow

I am treating this issue as Virgins error and will open another cash isa at some point this year. I followed their instruction and link in their  paper letter and did upload proof of identity. They obviously cannot join the dots.