I've got into a muddle!

masonic

So do I have this right?

1. You paid £1,550 into Zopa [subscriptions: Zopa £1,550; Chip £0. Replacement subscriptions available: None. Allowance used £1,550]
2. You flexibly withdrew the £1,550 from Zopa [subscriptions: Zopa £1,550; Chip £0. Replacement subscriptions available: Zopa: £1,550]
3. You combined the £1,550 with £18,000 other money and paid it all into Chip [subscriptions: Zopa £1,550; Chip £19,550 (of which £1,100 are invalid). Replacement subscriptions available: Zopa £1,550. Allowance used £21,100]
4. You flexibly withdrew everything from Chip [subscriptions: Zopa £1,550; Chip £19,550 (of which £1,100 are invalid). Replacement subscriptions available: Zopa £1,550; Chip £18,450. Allowance used £21,100]
5. You paid all of that balance into Zopa [subscriptions: Zopa £19,550 (of which £18,000 are invalid). Replacement subscriptions available: Chip £18,450. Allowance used £39,100]
6. You withdrew all but £1,550 from Zopa [subscriptions: Zopa £1,550. Replacement subscriptions available: Chip £18,450. Allowance used £39,100]
7. You paid it back into Chip [subscriptions: Zopa £1,550; Chip £18,000. Replacement subscriptions available: Chip £450. Allowance used £39,100]

So the only remaining issue is that Zopa and Chip will independently report £19,550 of total subscriptions used, totalling £39.1k, but none of the excess money remains in either ISA.

The only valid way to get the money currently in Chip into Zopa is to use the ISA transfer system. If you transfer the Chip ISA to Zopa, it will become a single ISA and at that point Chip won't report anything to HMRC about the ISA. So hopefully there would be no repercussions.

ItsForMe2024

There's nothing in chip now.
I've made a right mess.
I don't understand any of this.
I now have £1550 in Zopa
And £19k ISH in chase 

ItsForMe2024

I only transferred once into chip.
When I realised the interest was lower I transferred it all out back into Zopa then realised my mistake and ive now put £1550 back into Zopa and the rest into my chase account

There's is nothing in chip 

ItsForMe2024

1 2 and 3 are correct.
1) I Withdrew £1550 from Zopa added that and £18k ish to chip
2) took it all out and moved it all to zopa
3)Then moved all but £1550 back to my chase account 
Theres Nothing in chip
How much will I have to pay in tax for my meds up and how do I rectify it?
Should I ring HMRC about this ?
I'm worried about the implications 

masonic

If you contacted HMRC, they would just tell you to do nothing and that they will get in touch some time after the end of the tax year if they need to.

They usually take no action for a first offence other than warning you not to do it again. You did not at any time hold more than £20k in current year ISAs, so it is more of a technical breach than one you have profited from.

You still have valid ISA subscriptions at Chip that you've flexibly withdrawn and can replace, since that was where you first used your allowance above the £1,550 used at Zopa. You still have the option to transfer the Chip ISA to Zopa using the ISA transfer system. This should preserve your ISA allowance and achieve your desired outcome.

ItsForMe2024

So I have to put all the money back into chip (it's in chase bank) then transfer it all to zopa.?
Is it best to call chip and zopa to explain
I wish I'd never started this 
I've had COVID and just wasn't thinking straight.
I don't know how I could've made a monumental mess up ..

masonic

It is up to you, but that's the way to get your savings validly held within a Zopa ISA after having paid them into Chip.

If you call Chip or Zopa, then they have been instructed by HMRC to never advise customers in these circumstances because they are not in possession of all of the facts. They will most likely tell you to contact HMRC, who will in turn tell you they will contact you after the end of the tax year if they need to.

ItsForMe2024

masonic said:

It is up to you, but that's the way to get your savings validly held within a Zopa ISA after having paid them into Chip.

If you call Chip or Zopa, then they have been instructed by HMRC to never advise customers in these circumstances because they are not in possession of all of the facts. They will most likely tell you to contact HMRC, who will in turn tell you they will contact you after the end of the tax year if they need to.

Thank you so much. I really do appreciate the help you've given me. I really do. I'd be lost without all this information.
I started to panic 

ItsForMe2024

One more question do I have to put the exact amount of money back into chip that I put in there in the first place. Can it be less? Or does it need to be the same?

masonic

It can be less. Given that you originally used £1,550 of your allowance at Zopa, the most it could be is £20k - £1,550 = £18,450. Anything more than that breaches the annual allowance, so that is the maximum.