I have a UK cash ISA, but have lost track of whether I have transferred all the money that I am allowed to for this tax year. What happens if I try to top up a cash ISA, when I have already used my yealy quota?


According to HMRC it seems that if you overpay, then at least part of the interest generated by that ISA is taxable (emphasis mine):

If, by mistake, you put more than £10,680 into your ISAs in a tax year, the excess payments are invalid, and you are not entitled to any tax relief on investments purchased with the excess payments.

You should not try to correct this mistake yourself. Instead, you should call the ISA Helpline and explain the problem to them. They will advise you what action you need to take.

However, as AlexMuller pointed out, HMRC also states (in section 6.1 here) that the ISA Manager (ie. the bank/building society) should not allow you to overpay.

Managers’ systems must ensure that ... no more than the cash ISA subscription limit can be subscribed to a cash ISA in a tax year and that no more than the overall subscription limit can be subscribed to a stocks and shares ISA in a tax year.

As to what an individual ISA Manager would do should you attempt to over-pay, I imagine it would vary from Manager to Manager. ING Direct, for example, has the following policy (Taken from Section 12.5 here):

...f you send us a payment for an amount which would take you over the ISA investment limit under the ISA Regulations, we will send the excess above the investment limit, or, if you sent us the payment by cheque, the whole of that payment, back to you.

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I've been wondering the same thing - I can't find any "official" information from the banks, but there is the following info:

  • HMRC's guidance notes say that ISA managers (the bank) can not allow anyone to save more than the limit. These guidelines also say that HMRC will "contact you" if you it's discovered you are oversubscribing with two different providers.
  • This MSE thread says that the bank will post you a cheque back if you overpay into an ISA
  • This MSE thread says the same, or HMRC may send you a tax bill.

So, if it's all with the same bank - try it! The worst that can happen is that the bank won't credit your ISA and will refund you.

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  • Yes, the bank shouldn't credit. HMRC should get involved only if someone has got two ISA accounts, and that too should only be possible with separate banks, if at all. – Jaywalker Dec 7 '11 at 11:55
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    @Jaywalker It's possible to have multiple cash-ISA accounts, but you can only pay into one in any given tax year. I, for example, have a lump of money in a 2-year fixed-term ISA, and this year I've paid into a standard, variable-rate ISA with the same building society. – Edd Dec 8 '11 at 16:07

You shouldn't technically be able to over pay. I have some share dividends set to pay into my account but one of them took me over the limit so the payment was diverted to another account and they sent me a letter. Pretty sure they would do this with any payment.

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