Wondering if you can perform a back-end fix regarding my having added 6k to a new ISA this year by mistake. (I have no allowance left for this year at all, as Iāve deployed 20k elsewhere).
I accidentally moved 6k from Cash ISA to Invest.
I intended to move it to S&S ISA, not Invest.
I then rectified that within 1 minute and moved the 6k from Invest to S&S ISA.
(Both transactions were around 06.00 UK time on 19 Jan)
So now it looks like Iāve over-subscribed for this year: T212 is now showing I can add a further 14k, so that must be the case.
Can this error be straightened out in the T212 ledger?
Iām guessing not and HMRC will have me sent to an open-prisonā¦.
As far as Iām aware, the 20k ISA allowance can be spilt between (multiple) cash & stocks & shares ISAs, as long as the total investment doesnāt exceedĀ£20000.
T212 allows withdrawals that can be replaced within the same tax year without losing the benefits of an ISA eg if you had Ā£50k in an ISA, you would be able to withdraw it all and replace it again without exceeding the allowance or losing the ISA tax break.
This is not about this yearās 20k, which went into a non-T212 cash ISA.
This is about accidentally removing 6k from its existing T212 (multiple previous years) ISA wrapper into non-wrappered āInvestā and then putting it back into the T212 (multiple previous years) S&S, which has triggered a new subscription for this year.
@chemitrol Copilot seems to agree with you, in that the flexibility covers previous years too.
So presumably, I just ignore the allowance indicator and relax, as the pass-through of (previous years) 6k out of Cash ISA > Invest > S&S ISA in fact doesnāt matter at all?
Exactly. I transferred an ISA from AJ Bell which had the full Ā£20k from last year, and some contributions from the current tax year (plus gains). I topped it up with the balance remaining using up the full Ā£20k for this year, but T212 tell me I can still put Ā£5500 in. This is because T212 are only seeing my contributions on here.
I put the following query into Google Gemini and it gave me chapter and verse on this situation:
āIs there any reconciliation between UK savings institutions to ensure that savers do not abuse the legal limits on amounts going into ISAs and does this extended to stocks ISAs?ā
In particular read the bit about NOT trying to fix it yourself.
What it said was the UK financial institutions (including for stocks ISAs) have to submit annual ISA figures to HMRC and thatās when violations will come to light. It said do NOT try to fix it yourself by drawing money out as that will just complicate matters.
The information submitted will include national insurance numbers etc. so that it can be traced back to individuals.
In short: Yes, there is a reconciliation process, but it isnāt real-time between banks. Instead, the āpolicingā happens centrally through HMRC after the tax year ends, and this applies to all ISA types, including Stocks and Shares ISAs.
Since you are a developer using VB.NET and SQL Server, you can think of it as a delayed batch reconciliation rather than a distributed transaction. Here is how the system currently works:
The Reconciliation Mechanism (HMRC)
UK savings institutions do not communicate with each other directly to check your balances. Instead, every ISA manager (banks, investment platforms like Vanguard or Hargreaves Lansdown) is legally required to submit an annual return to HMRC.
The Key: Your National Insurance (NI) number.
The Process: At the end of the tax year, HMRC runs a cross-reference on all reported subscriptions associated with your NI number. If the sum of your deposits across Cash, Stocks and Shares, Innovative Finance, and Lifetime ISAs exceeds the Ā£20,000 limit, their system flags the breach.
Does this extend to Stocks & Shares ISAs?
Yes, absolutely. Stocks and Shares ISAs are treated as part of the same āaggregate limitā as Cash ISAs.
Shared Allowance: The Ā£20,000 is a global limit. If you put Ā£15,000 into a Cash ISA and Ā£10,000 into a Stocks and Shares ISA, the HMRC reconciliation will catch the Ā£5,000 oversubscription.
Platform Checks: While a single provider (e.g., your Stocks and Shares platform) will prevent you from depositing more than Ā£20,000 with them, they have no programmatic visibility into what youāve deposited with a different bank.
What happens if you āAbuseā the limit?
If the HMRC reconciliation flags an overpayment, they donāt usually treat it as a crime unless there is evidence of deliberate fraud, but they will ārepairā the tax benefit:
Contact: HMRC will typically contact the provider where the latest chronologically occurring deposit was made (the one that triggered the breach).
Voiding: They will instruct that provider to āvoidā the excess. The money is moved out of the ISA wrapper into a standard taxable account.
Taxation: Any interest or capital gains earned on that excess amount while it was āwronglyā inside the ISA will be taxed retrospectively.
Recent Rule Changes (2024/25 onwards)
Starting recently, the rules became more flexible regarding multiple ISAs of the same type. You can now pay into multiple Cash ISAs or multiple Stocks and Shares ISAs in the same year. This makes it even easier to accidentally exceed the limit, as you might have Ā£5k in four different places. This places the burden of tracking almost entirely on the saver until the year-end āauditā by HMRC.
Note for your VB.NET Projects: If you are ever building a financial tracking module for yourself, remember that the āISA Yearā runs from April 6th to April 5th, which often requires a bit of custom logic compared to standard calendar-year reporting.
Youāre right. It doesnāt mention fixing it yourself. It definitely said what I reported when I first asked the question. AI can be like that. I passed the information on in good faith. You can believe it or not, as you wish.
