ISA transfer fails due to NI number mismatch

Dagobert

I set up the Fixed Rate ISA with LLoyds TSB in February and requested the transfer of an existing ISA from a building society.

Receipt of the funds was rejected by TSB due to NI number mismatch 3 weeks ago. (TSB has the correct NI #). The BS has not replied to TSB since.

Question: Is an ISA manager obliged to check the validity of the NI number when setting up an ISA? In other words: should the BS have noticed the error when opening the ISA last year?

Any ideas who to contact at HMRC to establish whether they complied with the rules and regulations?


Needless to say, the funds have not been earning any interest since beginning of March.

RayWolfe

My understanding is that ISA providers do not check the correctness of NI numbers. They need them however to send to the tax man and it is they that check out the holder. However, I can see that on transfers, one of the providers checks for correctness of the transaction might be a cross check on NI numbers.

dunstonh

NI numbers are part of the matching check that takes place on ISA and pension transfers. A mismatched number could mean the product being transferred doesnt belong to you. Hence why you needed to get that sorted.

There is no requirement for the provider to check the NI number is correct at point of sale. The providers report to the HMRC who will act on errors. It can take upto 2 years for that to happen though.

Dagobert

dunstonh wrote:

NI numbers are part of the matching check that takes place on ISA ... transfers.

Presumably, there is no obligation for the ISA managers to do so either?

The building society received a transfer-in last year and there was a mismatch at that point, which was never acted upon.

dunstonh

Most will check. Its common sense as its an easy way to check for fraudulent transfers or errors. That doesn't mean all will or one gets missed due to human error (or laziness)