ISA interest tax free?

Dazed_and_C0nfused

GCSCLC said:

I did try to explain this to hmrc, saying that all money from Barclays was from an isa but she kept saying if its interest into bank then it counts towards savings allowance. Really don’t fancy another hour on hold to have that conversation again!

Have you got an Instant Saver Account by any chance 🤔

jimjames

TheSpectator said:

So either Barclays are reporting your ISA interest incorrectly or you are generating interest in your current accounts.

Or the account isn't actually an ISA

GCSCLC

eskbanker said:

GCSCLC said:

my interest earned from my ISA’s is paid directly into my current account

Are they definitely ISAs?  There was a recent thread where someone thought they had ISAs but they were referring to 'Instant Saver Accounts', which led to some confusion - can you clarify exactly what the product names are?

It’s definitely a cash isa. Issue 55. Had the option of transfers in etc. told about the £20k limit & tax year deadlines etc so definitely an isa

refluxer

IIRC, if you want a Barclays fixed rate cash ISA to pay interest paid monthly, then having it paid away to an external account is the only option. This is the reason why I selected to have the interest paid annually, so it remains within the ISA.

Barclays current accounts don't pay interest, so those ISA interest payments won't be earning interest within the current account.

GCSCLC

refluxer said:

IIRC, if you want a Barclays fixed rate cash ISA to pay interest paid monthly, then having it paid away to an external account is the only option. This is the reason why I selected to have the interest paid annually, so it remains within the ISA.

Barclays current accounts don't pay interest, so those ISA interest payments won't be earning interest within the current account.

So basically because I’m paid interest monthly, I have to pay tax on it as it’s going into my current account?

refluxer

Dazed_and_C0nfused said:

GCSCLC said:

I did try to explain this to hmrc, saying that all money from Barclays was from an isa but she kept saying if its interest into bank then it counts towards savings allowance. Really don’t fancy another hour on hold to have that conversation again!

Have you got an Instant Saver Account by any chance 🤔

If Barclays abbreviate that to 'ISA', then that would surely qualify for 'banking facepalm of the year' !

GCSCLC

Clearly my mistake if that is the case but if they made it clear that monthly interest means not tax free I definitely wouldn’t have picked that option!

refluxer

GCSCLC said:

refluxer said:

IIRC, if you want a Barclays fixed rate cash ISA to pay interest paid monthly, then having it paid away to an external account is the only option. This is the reason why I selected to have the interest paid annually, so it remains within the ISA.

Barclays current accounts don't pay interest, so those ISA interest payments won't be earning interest within the current account.

So basically because I’m paid interest monthly, I have to pay tax on it as it’s going into my current account?

No, that interest should still be tax-free so something is going wrong somewhere.

eskbanker

GCSCLC said:

eskbanker said:

GCSCLC said:

my interest earned from my ISA’s is paid directly into my current account

Are they definitely ISAs?  There was a recent thread where someone thought they had ISAs but they were referring to 'Instant Saver Accounts', which led to some confusion - can you clarify exactly what the product names are?

It’s definitely a cash isa. Issue 55. Had the option of transfers in etc. told about the £20k limit & tax year deadlines etc so definitely an isa

And the interest paid on/from this account in the relevant year corresponds exactly to what HMRC believe needs to be taxed via your PAYE coding notice?

GCSCLC

refluxer said:

GCSCLC said:

refluxer said:

IIRC, if you want a Barclays fixed rate cash ISA to pay interest paid monthly, then having it paid away to an external account is the only option. This is the reason why I selected to have the interest paid annually, so it remains within the ISA.

Barclays current accounts don't pay interest, so those ISA interest payments won't be earning interest within the current account.

So basically because I’m paid interest monthly, I have to pay tax on it as it’s going into my current account?

No, that interest should still be tax-free so something is going wrong somewhere.

If that’s a certainty then what should I do next? Hmrc clearly aren’t going to listen to me as I already tried informing them of that. My tax code has already changed & is changing massively in april