Cash ISA Interest

oldagetraveller1

Apologies for the question, I am no doubt being too lazy to search and/or find out for myself.

How do HMRC know that interest paid from a Cash ISA is tax free? 

Is there some kind of identifier that they know it's not from a non ISA savings account?

FrugaiMacDugal

All ISA interest is tax free, HMRC don't need to know, it's non declarable.

flaneurs_lobster

FrugaiMacDugal said:

All ISA interest is tax free, HMRC don't need to know, it's non declarable.

Your contributions are reported to HMRC by the ISA managers as part of their annual reporting return, assume that any interest is also reported but will be flagged as not taxable.

born_again

When you take out a ISA, you have to provide you National Ins Number. So HMRC know you have a ISA which are all interest free.

Albermarle

My guess would be hat they just do not provide HMRC with any interest figures for a cash ISA.

flaneurs_lobster

flaneurs_lobster said:

FrugaiMacDugal said:

All ISA interest is tax free, HMRC don't need to know, it's non declarable.

Your contributions are reported to HMRC by the ISA managers as part of their annual reporting return, assume that any interest is also reported but will be flagged as not taxable.

Just checked the ISA Manager Annual Returns spec - quite right, interest earned is not reported.