Guidance

Tax-free savings newsletter 6 — November 2022

Published 23 November 2022

1. Individual Savings Accounts (ISAs)

1.1 ISA manager notification of changes form

As part of an application to manage Individual Savings Accounts (ISA), we collect information about the ISA manager, their business, and the people they’d like us to deal with for ISA related issues. We’d like to remind ISA managers that they must tell us when any of those details change.

The notification of changes form should be used to tell us about the following changes:

• cessation
• change of registered name, address, or bank/building society details
• change of trading name
• addition or removal of liaison officer
• addition or removal of signatory

Two people must complete the declaration and only authorised signatories already known to us in this capacity can do this. If an authorised signatory is leaving the business, a notification of changes form must be submitted in advance to remove them and, if required, add someone else. If the authorised signatories have already left the business and you need to submit a notification of changes form, contact savings.compliance@hmrc.gov.uk for further guidance.

We are aware that some customers have experienced issues when accessing this form recently, and these issues have now been resolved. If you have difficulties accessing the form in future, contact savings.compliance@hmrc.gov.uk.

1.2. ISA10 and ISA14 claim forms

During the coronavirus pandemic we introduced some temporary changes to help ISA managers, allowing the ISA10 and ISA14 claim forms to be submitted electronically. This easement has now been withdrawn and ISA managers will need to send ISA10 and ISA14 forms by post. We will accept a digital signature or a wet signature on these forms.

1.3. Side Pocket investments — transfer requirements

ISA Regulation (21(3)) requires current year (CY) subscriptions to be transferred as a whole. There is no provision for a partial transfer of a current year subscription within an ISA.

We are aware that this causes an issue where an ISA investor holds a fund purchased with a CY ISA subscription which includes a suspended side pocket investment. If the investor intends to transfer their ISA, but must, or wants to leave the side pocket element with the original ISA manager, this will result in 2 stocks and shares ISAs with CY subscriptions.

Although this would not affect the underlying ISA eligibility of either the side pocket or the wider fund, it would not be possible for an investor to transfer their CY subscriptions in this scenario. Therefore, the following options are available:

1. Transfer the side pocket and main body investment to the receiving ISA manager (if this is permitted by the authorised fund manager and acceptable to the receiving ISA manager).
2. Remove the ISA wrapper from the side pocket investment and transfer the main body of the fund. Any subsequent gain would be taxable in the usual way.
3. Postpone the transfer until the following tax year.

Find more information on side pockets.

1.4. Contacting HMRC

We’d like to remind ISA Managers that when contacting us, you must use your Z reference number on all forms and letters. This ensures that all contact can be dealt with correctly.

2. Child Trust Funds (CTF) and Junior ISAs (JISA)

2.1 Request for withdrawal of ‘misdirected’ CTF or JISA payments

We’d like to remind Providers and managers of the policy that applies where there is a request for a withdrawal of a payment made into a CTF or JISA.

The purpose of a CTF and JISA is to provide a child with a financial asset at the start of their adult life and to encourage long-term saving. For this reason, the rules specify that HMRC can only sanction the withdrawal of monies from a CTF or JISA before the child reaches 18, where the account holder is terminally ill.

If a provider concludes that any payments into a CTF or JISA were rightly subscribed to the account, then HMRC does not have the power to authorise the withdrawal of those payments.

However, the Financial Conduct Authority (FCA) Handbook imposes requirements on financial services providers to pay due regard to the interests of their customers and treat them fairly. In addition, most account providers have established policy on misdirected payments, under which they commit to helping people recover funds where a transfer or payment was made by mistake or inadvertently.

Where it is argued by the individual who made the payment that the moneys transferred to a CTF or JISA were misdirected or misplaced, it is for the provider to determine whether the moneys can be returned in line with FCA Principles and their own terms and conditions, and act accordingly. HMRC cannot endorse such decisions.

2.2 Changes to CTF provider details

We’d like to remind CTF providers of the requirement to notify us where they intend to cease to act as a CTF provider or no longer qualify to act as such.

We’d like to ask CTF providers to check their details on the list of authorised CTF providers and if any changes are required, email savings.compliance@hmrc.gov.uk with ‘Change to CTF Provider Details’ in the subject line.

3. Lifetime Individuals Savings Account (LISA)

3.1 Bonus payments

The LISA bonus claim period runs from the 6th of the month to the 5th of the following month. Bonus claims can be submitted to HMRC at any time, but the deadline for making a monthly bonus claim is the 20th day of the month following the end of the claim period. This 14-day period can also be used by the LISA manager make corrections or deal with unsuccessful responses to bonus claims.

The reporting period ends on the 20th day of each month and any payments to be made will not be visible before this date. Any transactions for the claim period received after 20th, will be processed the following month and deemed late.

3.2 Direct Debits

LISA managers must ensure that all accounts you manage have a live Direct Debit, otherwise errors with the payment of bonuses could occur. It is important you update your Application Programming Interface (API) as soon as possible if there are any changes to bank or personal details. If you receive an error message, please contact sdsteam@hmrcgov.uk.

3.3 Transfers

When receiving a transfer from another LISA manager, the receiving manager should not create an account for the investor before the transfer has been received. This will produce an error when submissions are processed. Guidance on Transfers can be found at Transferring a LISA account

3.4 Testing API’s or uprating APIs

It’s important that you notify us if you uprate or upgrade your LISA APIs to make sure the changes are compatible with our API. If any changes are not checked with HMRC, this could lead to errors with the API. Further guidance can be found at Linking your account management software to HMRC.

3.5 Token resets

LISA managers should ensure that personal details are correct and up to date and that Government Gateway credentials are correct. Guidance can be found at Authorisation Guidance. If you need to contact HMRC, please contact us by emailing sdsteam@hmrc.gov.uk.

3.6 Guidance

If you have a query about LISAs, you should first look at the LISA Guidance. If you cannot find an answer to your query, please contact us by emailing savings.audit@hmrc.gov.uk.

4. Help to Save Statistics

We’re proposing some changes to the Help to Save statistics we publish and we’re looking for views from users of this publication, so we can continue to produce relevant statistics that meet your needs.

If you would like to comment on the proposed changes to HMRC’s Help to Save statistics, please see the Statistics consultation and respond by emailing statisticsenquiries@hmrc.gov.uk.