Income Tax?

[Psybbo]

Help, please
I have an ISA, but am trying to build up enough to add to the ISA next year in an e-saver which deducts tax from it but it appears HMRC then deduct tax again. Is this the case?

[jennyjoan]

I know nothing about the blOOdsy things - but I sold mine two months ago - they were only making 0.5% interest. I am now in a 123 current account and it has made me a bit of interest - bigger than the ISA.

[Tuvok]

You pay tax on any account that is not an ISA.

[DTCwordfan]

I'm surprised that the HMRC want to deduct tax again unless the amount that is deducted at source from the e-saver account is too low or relative to your income. There are a lot of e-savers that pay on a gross basis - for example the Post Office who pay 1.4% gross for the 1st year reverting to 0.75% thereafter - they can take from £1 to 2 million....

I believe you can only hold one such account at any one time (plus one joint account).

[DTCwordfan]

It would be tax corrected on your annual tax submission though - however, you would have to wait for the cheque/credit.

[Aquariel]

What kind of ISA do you have? You say you're building up savings to add to your ISA - why not just put the money you don't need immediately into the ISA and get the tax-free benefits straight away? Most ISAs let you deposit whenever you like, but a lot have restrictions on withdrawals.

[ubasses]

Tax from you E Saver should be deducted and the time the interest is paid and extra tax should only be due if you are a higher rate tax payer and should be done through a tax return.
How does it appear that HMRC are taking more?

[Gizmonster]

I'm fairly sure that most bank accounts deduct tax from interest at source, so no need to pay additional tax - unless you're a higher rate tax payer.
I'm confused when you say it appears that tax is being deducted again - can you clarify this please ??
As for the number of ISA's you can hold, there are limits on the number of ISA accounts you can subscribe to each tax year. You can only put money into one cash ISA and one stocks and shares ISA.
You can hold more than one ISA, as you can subscribe to a different one each year, if you so wish.

[Psybbo]

I have used this year's allowance for the ISA, just trying to save up for next year but don't want to be taxed twice

[Gizmonster]

I'm still not sure on your concept of being taxed twice ??
Anything in the ISA is tax free.
When you earn interest in your e-saver, it'll be taxed accordingly, each tax year, so, say for example, you hold it for 2 tax years, you'll be taxed twice - which is the norm .......

[Slapshot]

My wife has an Aunty Isa if that's any good......

[VHG]

As Jennyjoan says, open a 123 current account and put your money in there.

You get 3% in a Santander current account up to £20,000 (which more than you get in an ISA).

http://www.santander-products.co.uk/banking/media/123.html?gclid=CKzi6MqsmsICFWXnwgodc6MA9g

And a Nationwide FlexDirect account pays 5% up to £2,500 for the first year.

http://www.santander-products.co.uk/banking/media/123.html?gclid=CKzi6MqsmsICFWXnwgodc6MA9g

I have opened both these accounts in the last couple of weeks and paid money from a low interest savings account into them.

Many banks are offering good deals to attract new current account customers.

[VHG]

Whoops I posted the same Santander link twice.

Here is the link to the Nationwide account

http://www.nationwide.co.uk/products/current-accounts/our-current-accounts/overview

[Psybbo]

Slappy, I'll ask her. Thank you all for your answers.