HMRC is ramping up its audits of ISA managers this tax year, including Innovative Finance ISA (IFISA) providers, and removing firms that no longer use their permissions from its ISA managers’ list.
The taxman has been checking applications and subscriptions, returns and repayment claims, qualifying ISA investments, terms and conditions, and processes and controls to ensure providers have managed the ISA scheme in accordance with the regulations.
After completing the audit, HMRC will write to the IFISA provider within 28 days to confirm if any further action is required and if it identifies breaches of the ISA regulations during an audit, it will discuss these with the provider.
The taxman said that breaches will be dealt with in accordance with the regulations and published guidance.
“As we announced last year, we have expanded our programme of audits of ISA managers to ensure that ISAs of all types comply with the regulations,” a spokesperson from HMRC told Peer2Peer Finance News.
HMRC said that the HMRC and Financial Conduct Authority (FCA) ISA intelligence working group, which was set up last year to improve HMRC’s ISA manager register, in response to the Gloster report’s call for better engagement between regulatory bodies, has removed more firms from the register.
“The work of the HMRC and FCA ISA intelligence working group has to date led to HMRC removing 45 ISA managers from our approved list,” HMRC added.
In December, HMRC set out proposals for ISA managers to face new penalties if they break ISA rules, including a £10 fine per compliance breach, per account, multiplied by the number of relevant tax years.
Similarly, the FCA has also been increasing its surveillance of firms, with the number of financial promotion interventions increasing by 272.46 per cent, year-on-year.