Could savers be given access to multiple IFISAs each tax year?

ISA SAVERS should be able to hold more than one of the same type of wrapper during a single tax year, the government’s tax adviser has said.

The Office of Tax Simplification (OTS) – an independent adviser to the government on simplifying the tax system – has said ISA rules should be made more simple for investors to administer.

It suggests changing the rule where only one type of ISA can be opened at a time and instead letting savers hold multiple products, such as more than one Innovative Finance ISA from different peer-to-peer lenders or a variety of cash ISAs, as long as they remain within the annual allowance.

“The OTS considers further changes can be made to make ISAs rules simpler for investors and easier to administer,” the OTS said.

“These might include enabling partial transfers of money invested in-year, in line with transfers from previous years’ ISAs and removing the requirement that an investor may only take out one ISA of each type per year subject to the overall annual limit.”

Such a change would mean an investor could open a new IFISA from Funding Circle, Zopa and RateSetter in the same tax year.

Read more: Personal savings allowance “hampered” IFISA take-up 

Currently only one new IFISA from a single provider can be held in each tax year but there would be nothing to stop users transferring old funds to IFISAs from a previous period.

In March, Lending Works gave its backing to the creation of an ISA wrapper that encompasses all types of tax-free savings in one place.

The P2P lender warned that politicians mustn’t forget the “simplicity and user-friendliness” that ISAs were initially set up for. It said that the creation of several different tax-free products such as the IFISA created added complexity.

Read more: IFISA special report