Zopa mistake

northisace

Another very frustrated Zopa customer who only found out the truth of the issue following self led investigation with HMRC to find out my taxable savings interest in their calculation was massively distorted by Zopa's mess up of my tax free ISA.
Formal complaint made to Zopa who advised they corrected their savings interest return to HMRC in October but accept it was unacceptable that customers were not informed and left to fight their own battles with HMRC for a known issue. Offered £150 compensation for the stress and inconvenience caused by their lack of transparency. They have assured me they have resolved the process for 25/26 when they make their next HMRC returns, will be watching closely on that.
HMRC relatively helpful on my latest call. Agreed to suspend the Simple Tax Assessment for 6 months whilst the offending error is removed. I have sent HMRC the savings interest certificate from Zopa which does actually confirm zero taxable interest for 24/25 on my account with them. HMRC said it would be sorted out when processed but removed the pay by 31st January tax bill previously sent (not in employment so my concern was a lump sum tax demand rather than a tax code change).
Truly dreadful that Zopa are playing this as a wait and see if customers complain game. So many needless calls and letters to HMRC from customers trying to unravel this when they should have fessed up and provided some support.

wiseonesomeofthetime

I no longer have a banking relationship with Zopa, following numerous negative customer service experiences with them, so I reckon a complaint from me would fall on deaf ears now.

_JasonR

masonic said:

_JasonR said:

My journey so far...

I had contacted HMRC in early November and discovered there was something not right with the amount I was being taxed. Through many hours on calls with HMRC I worked out that Zopa had reported my ISA as taxable interest. It emerged that this was a double whammy as the ISA interest was being reported both as a taxable interest estimate for the current year (deducted at source from my salary), plus as a ‘underpaid’ tax demand for the last tax year (FY 24/25).

HRMC did initially remove the ‘ISA tax’ from the current year estimate, but a couple of weeks later, I received another tax code change notification and found it had resurfaced again just in time for the next payroll, leaving me short. HMRC say that the systems refreshed and overwrote the correction that had been made. The correction has been re-applied again, but HMRC say that the way the system is configured, it may be overwritten again and they have no control over it! As for the tax demand for last year, HMRC have so far refused to recalculate / correct it as they say that they will only do this if revised data is provided by Zopa. Meanwhile, Zopa say that they have supplied revised data but there is an issue with HMRC being able to process it.

I felt sure I could not be alone in my experiences and came across this forum. From what I read, the problems have been recurring for around 2 years and are particular to Zopa. It strikes me as unusual that all Zopa savings products share the same account number, and are a mixture of taxable and non-taxable accounts. I wonder if that has something to do with it?

In recent conversations with both Zopa and HMRC, both have acknowledged that there is a known problem, but what is missing is any commitment on when matters will be resolved, or on any kind of ’workaround’ to prevent customers suffering in the meantime. Right now, I am left financially short and wasting many hours on the phone seemingly banging my head against a brick wall!

Savings pots under a main account seem to be a feature of several new providers (Plum does something similar), but it is for Zopa to know what is ISA and what is not and report accordingly to HMRC. At some level, the ISA needs to be managed as a separate account to be compliant with the regulations.

Clearly the failure has had a real impact on your finances, so that should be reflected in the compensation you are offered by Zopa. Perhaps more than the £150 mentioned a few posts up, given the tax coding consequences.

Heard back again from Zopa - they value my experience at £125...

masonic

_JasonR said:

masonic said:

_JasonR said:

My journey so far...

I had contacted HMRC in early November and discovered there was something not right with the amount I was being taxed. Through many hours on calls with HMRC I worked out that Zopa had reported my ISA as taxable interest. It emerged that this was a double whammy as the ISA interest was being reported both as a taxable interest estimate for the current year (deducted at source from my salary), plus as a ‘underpaid’ tax demand for the last tax year (FY 24/25).

HRMC did initially remove the ‘ISA tax’ from the current year estimate, but a couple of weeks later, I received another tax code change notification and found it had resurfaced again just in time for the next payroll, leaving me short. HMRC say that the systems refreshed and overwrote the correction that had been made. The correction has been re-applied again, but HMRC say that the way the system is configured, it may be overwritten again and they have no control over it! As for the tax demand for last year, HMRC have so far refused to recalculate / correct it as they say that they will only do this if revised data is provided by Zopa. Meanwhile, Zopa say that they have supplied revised data but there is an issue with HMRC being able to process it.

I felt sure I could not be alone in my experiences and came across this forum. From what I read, the problems have been recurring for around 2 years and are particular to Zopa. It strikes me as unusual that all Zopa savings products share the same account number, and are a mixture of taxable and non-taxable accounts. I wonder if that has something to do with it?

In recent conversations with both Zopa and HMRC, both have acknowledged that there is a known problem, but what is missing is any commitment on when matters will be resolved, or on any kind of ’workaround’ to prevent customers suffering in the meantime. Right now, I am left financially short and wasting many hours on the phone seemingly banging my head against a brick wall!

Savings pots under a main account seem to be a feature of several new providers (Plum does something similar), but it is for Zopa to know what is ISA and what is not and report accordingly to HMRC. At some level, the ISA needs to be managed as a separate account to be compliant with the regulations.

Clearly the failure has had a real impact on your finances, so that should be reflected in the compensation you are offered by Zopa. Perhaps more than the £150 mentioned a few posts up, given the tax coding consequences.

Heard back again from Zopa - they value my experience at £125...

I suspect the Financial Ombudsman Service would award you more and certainly not less. You could ask them if the £125 offer is their final response and if so could they issue a letter of deadlock as you remain unhappy. Based on what you've said, Zopa's actions have resulted in deductions being made to your wages inappropriately, causing you financial hardship. I would be looking for north of £200, given these aggravating factors.

I don't think there is any precedent for this issue featuring in an Ombudsman decision, but some technical difficulties opening a fixed ISA can lead to an initial £100 low-ball offer for distress and inconvenience, increased to £250: https://www.financial-ombudsman.org.uk/decision/DRN-5167417.pdf

johnbhoy70

I had a bit going on end November and only paid a cursory glance at the HMRC letters coming in for both me and wife. They've done it to both of us too. Stuck in a couple of complaints asking them basically what they're doing and told them they've affected both me and wife's tax at work and personal allowance.
Received a couple of generic responses on 30th so we'll see what they say before I go back to HMRC. Not amused by this tbh and could do without it. Surely this is basic stuff!

wiseonesomeofthetime

I got a generic response as well, along the line of HMRC have been informed and I've no action to take.

Received nothing concerning how they intend to resolve my complaint.

Ocelot

fredblessed said:

I got this sorted after two calls to HMRC. They are aware of the issue (lots of people affected) and are working with Zopa to fix it for everyone. In my case I had been saving up for a 'turnip in the country' so my tax code was completely messed up. HMRC were very nice about it and have amended the estimated interest for the current tax year so my code has gone back to what it was. Hopefully, Zopa will get this right next year? Third time lucky?

Is it your 'dream turnip'?

spherical_badger

I was also affected by this. Took a few weeks but I've heard back from Zopa re: my complaint. They're offering £50 compensation, so I guess they're getting a few more grumpy messages and have decided to dial down the initial offer. I do reckon the stress of a surprise tax change and missing income just before xmas deserves more, but they've got me beat - I just can't be bothered dragging this out further.

For anyone else wondering what to do, Zopa said that all HMRC contact centre teams have now been informed of the issue, and that HMRC will correct their records and issue updated tax codes and corrections in the coming weeks. I've still half a mind to call HMRC if i don't hear anything in a few days - seems like both Zopa and HMRC have dropped the ball here so I don't entirely trust they'll sort it without a nudge. Still in disbelief that they just didn't tell anyone there'd been a problem, nevermind that a bank could fail at such a basic task.

gesdt50

Zopa couldn't even manage a ISA which is tax free and went and reported to HMRC to deduct tax from ones account, I have spent 3 hours on the app just trying to get a proper confimation, that 3 hours at work rate time near £60 and 1 hour 20 minutes to Hmrc who sent me also around the houses only to leave me with a new number to ring which I have yet to find time to do as I don't expect Hmrc to pay back any money unless chased and confirmations sent via some method

masonic

gesdt50 said:

Zopa couldn't even manage a ISA which is tax free and went and reported to HMRC to deduct tax from ones account, I have spent 3 hours on the app just trying to get a proper confimation, that 3 hours at work rate time near £60 and 1 hour 20 minutes to Hmrc who sent me also around the houses only to leave me with a new number to ring which I have yet to find time to do as I don't expect Hmrc to pay back any money unless chased and confirmations sent via some method

A complaint could be drafted in about 10 minutes max for a simple uncontentious issue such as this and sent electronically (then forget about it for a few weeks, decide if what they propose to put it right is acceptable, and optionally forward that complaint to the FOS for another 10 minutes work). Likewise a letter to HMRC, given they are aware of the issue, should do the trick, but may not even be required based on @spherical_badger 's post above. Did your 3.5 hours yield a better outcome than could have been expected from the simple approach?