Accidentally Paid Into Two Cash ISAs: What Happens and How to Fix It

Disclaimer: This guide explains how the UK ISA system works. It does not constitute financial advice. Rules described here are based on HMRC regulations and published guidance. Individual circumstances vary. If you are unsure about your situation, contact HMRC directly.

The rules governing how many Cash ISAs you can hold in a single tax year changed significantly on 6 April 2024. Before that date, subscribing to more than one Cash ISA in the same tax year was a breach of the ISA Regulations — a so-called "disallowed combination." After that date, the restriction was removed for most adult investors.

This guide explains both the pre-April 2024 and post-April 2024 positions, what happens when the rules are breached, how HMRC's repair process works, the timelines involved, and the specific edge cases that can still catch people out.

If you paid into two Cash ISAs in the same tax year before 6 April 2024, the second Cash ISA was a disallowed subscription under the ISA Regulations 1998. That subscription may need to be "repaired" — a formal process involving your ISA manager and, in some cases, HMRC. How the repair works depends on whether the error was caught during the same tax year or discovered after the tax year ended.

If you paid into two Cash ISAs in the same tax year from 6 April 2024 onwards, this is generally permitted. The restriction on holding only one Cash ISA per tax year was removed by the Individual Savings Account (Amendment) Regulations 2024 (SI 2024/350). However, important exceptions remain for Lifetime ISAs, Junior ISAs, and investors aged 16–17 under transitional arrangements.

In both cases, the overall annual ISA subscription limit of £20,000 still applies across all ISA types combined. Exceeding this limit triggers a separate repair process regardless of when the error occurred.

The ISA scheme is administered by HM Revenue & Customs (HMRC) under the Individual Savings Account Regulations 1998 (SI 1998/1870), as amended. The tax advantages of ISAs — exemption from income tax (and capital gains tax where applicable) — are governed by the Income Tax (Trading and Other Income) Act 2005 (sections 694–701) and the Taxation of Chargeable Gains Act 1992 (section 151).

ISA managers (banks, building societies, investment platforms) operate under terms agreed with HMRC. They are responsible for checking that subscriptions comply with the rules, but each manager is only responsible for ensuring their own subscriptions do not breach limits. They are not required to establish how much an investor has subscribed to ISAs held with other providers. The investor is responsible for managing the overall subscription limit across all providers.

When a breach occurs — whether a disallowed combination of ISAs or an excess subscription — the ISA Regulations set out a formal repair process. These repair procedures are governed by Regulations 4A and 4B of the Individual Savings Account Regulations 1998 (as amended). Regulation 4A deals with situations where an investor subscribes to more than one ISA of the same type (relevant before April 2024), and Regulation 4B covers situations where the overall subscription limit is exceeded.

The One-Cash-ISA Rule (6 April 2017 to 5 April 2024)

From 6 April 2017 to 5 April 2024, Regulation 4 of the ISA Regulations 1998 restricted investors to one Cash ISA per tax year. Subscribing to a second Cash ISA in the same tax year constituted a "disallowed combination" that rendered the second ISA a disallowed subscription under the Regulations.

The Rule Change (From 6 April 2024)

The Individual Savings Account (Amendment) Regulations 2024 removed the one-per-tax-year subscription restriction for Cash ISAs, Stocks and Shares ISAs, and Innovative Finance ISAs. From 6 April 2024 onwards, investors can subscribe to multiple Cash ISAs in the same tax year. Lifetime ISAs and Junior ISAs retain the "one per tax year" restriction.

The Overall Subscription Limit

The overall annual ISA subscription limit for adults is £20,000 for the 2024/25 and 2025/26 tax years. This limit applies across all ISA types combined. The tax year runs from 6 April to 5 April. The allowance cannot be carried forward to a future tax year. From 6 April 2025 to 5 April 2030, the limit remains at £20,000.

Other Key Limits

• Lifetime ISA: Has a separate annual payment limit of £4,000, which forms part of the overall £20,000 limit. A government bonus of 25% applies to contributions, up to £1,000 per year. Only one Lifetime ISA can be subscribed to per tax year.
• Junior ISA: The annual subscription limit is £9,000 per child, not per account type. A child can hold one Cash Junior ISA and one Stocks and Shares Junior ISA throughout childhood.

Current Year Repair Process

When the error is identified during the current tax year, the repair process follows these steps:

1. The ISA manager identifies (or is informed of) the excess subscription or disallowed combination.
2. If the manager's cross-check takes place within 60 days of the first subscription to the second ISA or the over-subscription, the manager may void the disallowed subscription under the 60-day correction rule without contacting HMRC. This 60-day voiding provision does not apply to Lifetime ISAs, where the manager must contact HMRC before voiding.
3. The manager can advise the investor that the excess and related income or gains will be removed. The investor should provide instructions on which subscriptions to remove.
4. Valid current-year investments in the repaired ISA may retain their tax exemption.

Previous Year Repair Process

Where the error is not caught until after the tax year has ended:

1. HMRC may identify the over-subscription through annual information returns submitted by ISA managers.
2. HMRC writes to the investor before instructing the manager to carry out the repair. The manager should not repair without a formal notice of discovery from HMRC.
3. The date of the notice becomes the date of repair. Invalid investments lose their tax exemption from the date of the first invalid subscription through to the date of repair.
4. Within 30 days of the notice date, the manager must identify the investments purchased with the excess subscriptions and remove them, along with any income arising on those investments.

Tax Treatment of Removed Subscriptions

For Cash ISAs, interest attributable to invalid subscriptions loses its ISA tax exemption and is treated as taxable savings income. Income removed from a repaired ISA counts towards the investor's Personal Savings Allowance.

Where Lifetime ISA Is Also Involved

Where a Lifetime ISA has also been subscribed to in the same tax year, excess subscriptions must be removed from non-Lifetime ISAs in date order. For Lifetime ISA repairs specifically, the manager must contact HMRC (unlike other ISA types). Excess subscriptions may be removed without a withdrawal charge, but any government bonus paid on the excess must be returned to HMRC.

Settlement Formula for Cash ISA Repairs

For Cash ISA repairs carried out under simplified voiding, HMRC may apply a standardised settlement calculation when resolving certain Cash ISA repairs, based on estimated average yields and tax treatment. The exact amounts are set by HMRC policy and may change over time.

Contacting HMRC

An investor can contact HMRC's Income Tax general enquiries helpline on 0300 200 3312 to discuss an ISA error. However, HMRC will only take formal action after the end of the tax year, once it has received audit data from ISA companies.

"I opened two Cash ISAs this year — is that still a problem?" It depends on the tax year. From 6 April 2024, subscribing to multiple Cash ISAs in the same tax year is permitted for most adult investors. Before that date, it was not. The overall £20,000 limit still applies regardless of when or how many accounts are opened.

"My ISA manager will catch any mistakes automatically." Each ISA manager is only responsible for subscriptions held with them. If you hold ISAs with different providers, no single manager monitors your total across all providers. It is the investor's responsibility to ensure the overall £20,000 limit is not exceeded across all ISA managers.

"I can fix this by moving money between accounts." ISA repairs follow a formal statutory process. The repair cannot simply be reversed by transferring funds. Depending on whether the error occurred in the current or a previous tax year, the repair may involve HMRC directly.

"If HMRC hasn't contacted me, there's no problem." HMRC only acts after the tax year ends and it has received audit data. The absence of contact during the tax year does not mean no breach occurred. If a disallowed combination was created before April 2024 or the £20,000 limit was breached, HMRC may contact the investor after the relevant tax year closes.

"The rule change means all ISA restrictions are gone." The April 2024 amendment removed the one-per-type restriction for Cash ISAs, Stocks and Shares ISAs, and Innovative Finance ISAs. It did not remove the one-per-type restriction for Lifetime ISAs or Junior ISAs. The overall £20,000 annual limit remains in force, as does the £4,000 Lifetime ISA sub-limit and the £9,000 Junior ISA limit.

ISA Managers with Non-Communicating Systems

ISA managers that operate multiple systems — for example, following mergers, amalgamations, or takeovers — where those systems do not communicate with each other may carry out cross-checks at regular intervals rather than in real time. This is an interim measure; some providers operate periodic rather than real-time checks due to system constraints. If an over-subscription is found within 60 days under these circumstances, it can still be corrected without HMRC contact.

Investors Aged 16–17 (Transitional Arrangements)

Investors aged 16–17 who held an existing Cash ISA at 5 April 2024 may continue subscribing to that ISA or transfer it until 5 April 2026 under transitional arrangements. However, these investors cannot subscribe to more than one Cash ISA per tax year — the multiple Cash ISA rule change does not apply to them during the transitional period.

Those who turn 16 after 5 April 2024 cannot open an adult Cash ISA until they reach age 18. A current-year Cash ISA for a 16–17-year-old must be transferred in full. These transitional arrangements end at midnight on 5 April 2026.

Flexible ISAs

Flexible ISAs allow withdrawal and replacement of funds within the same tax year without the replacement counting towards the annual subscription limit. However, the replacement must be made to the same account from which the withdrawal was made, and it must occur in the same tax year. Under the pre-April 2024 rules, this replacement could not breach the "one ISA of each type" restriction. Lifetime ISAs cannot be flexible.

Provider-Level Restrictions After April 2024

Even though the regulatory restriction on multiple Cash ISAs was removed from 6 April 2024, individual ISA managers can choose to limit subscriptions to only one ISA of each type per tax year with them. The regulatory change is not mandatory for managers to implement. Some providers may still only allow one Cash ISA per tax year within their own product range.

Multiple Managers and Cross-Provider Awareness

Where a manager becomes aware that an investor holds a disallowed combination or over-subscription with a different manager, the manager should advise the investor that HMRC will contact them. However, managers are not required to proactively investigate or monitor subscriptions held elsewhere.

For errors that occurred before 6 April 2024 — where an investor subscribed to two Cash ISAs in the same tax year — the second subscription was disallowed. If the error was identified by the ISA manager within 60 days, the disallowed subscription could be voided relatively quickly without HMRC's direct involvement. If the error was not caught in time, HMRC may identify it through annual audit data and contact the investor to initiate the formal repair process. Invalid investments lose their tax-exempt status from the date of the first invalid subscription to the date of repair, and any interest attributable to the invalid portion loses its ISA tax exemption and is treated as taxable savings income.

For errors involving the overall £20,000 subscription limit — which remains relevant regardless of the April 2024 changes — the process is similar. In the current year, the manager advises the investor and removes the excess based on the investor's instructions. In previous years, HMRC issues a notice of discovery and the manager must act within 30 days.

The practical difference between current-year and previous-year repairs is significant. A current-year correction may preserve the tax exemption on valid investments within the repaired ISA. A previous-year repair, by contrast, results in the loss of tax exemption for the entire period from the first invalid subscription to the repair date.

Where multiple ISA providers are involved, no single manager has visibility of the full picture. The investor bears the responsibility of tracking total subscriptions across all providers. Each manager will only address breaches within their own accounts.

Q: I paid into two Cash ISAs in the 2023/24 tax year. What happens now? The 2023/24 tax year fell under the pre-April 2024 rules, where only one Cash ISA subscription was permitted per tax year. The second Cash ISA subscription was a disallowed subscription. If the error has not yet been identified, HMRC may identify it when processing annual information returns from ISA managers and contact you to initiate a repair.

Q: I paid into two Cash ISAs in the 2024/25 tax year. Is that allowed? From 6 April 2024, subscribing to multiple Cash ISAs in the same tax year is permitted for most adult investors. The key restriction that remains is the overall £20,000 annual subscription limit across all ISA types combined.

Q: What does "repair" actually mean? A repair is the formal process by which an ISA manager removes invalid subscriptions and any income or gains earned on them. The process is governed by the ISA Regulations and, for previous-year errors, requires a notice of discovery from HMRC before the manager can act.

Q: Will I be fined or penalised? The primary consequence of a breach is the loss of tax exemption on the invalid subscriptions and any related income or gains. Interest attributable to an invalid Cash ISA subscription loses its ISA tax exemption and is treated as taxable savings income. Income removed from a repaired ISA counts towards the investor's Personal Savings Allowance.

Q: How long does HMRC take to contact me about a previous-year error? HMRC has stated that it takes action after the end of the tax year once it has received audit data from ISA companies. No specific timeframe for when HMRC will contact investors has been published in primary sources.

Q: Can my ISA manager fix the problem without involving HMRC? In the current tax year, if the manager identifies the error within 60 days of the over-subscription or disallowed combination, they may void the second ISA without contacting HMRC. This does not apply to Lifetime ISAs. For previous-year errors, the manager must wait for a notice of discovery from HMRC before carrying out a repair.

Q: I have ISAs with different providers — who is responsible for checking the limit? Each ISA manager is only responsible for ensuring that subscriptions held with them do not exceed limits. They are not required to establish amounts subscribed to ISAs held with other managers. The investor is responsible for managing the overall subscription limit across all providers.

Q: Does the £20,000 limit apply per ISA or across all ISAs? The £20,000 limit applies across all ISA types combined in a single tax year. This includes Cash ISAs, Stocks and Shares ISAs, Innovative Finance ISAs, and Lifetime ISAs (which have an additional sub-limit of £4,000).

Q: I'm 16 — can I open multiple Cash ISAs? Investors aged 16–17 who held an existing Cash ISA at 5 April 2024 are subject to transitional arrangements and cannot subscribe to more than one Cash ISA per tax year until 5 April 2026. Those who turn 16 after 5 April 2024 cannot open an adult Cash ISA until they reach age 18.

Q: My provider says I can only open one Cash ISA with them, even though the rules changed. Is that correct? Individual ISA managers can choose to limit subscriptions to one ISA of each type per tax year within their own product range, even though the regulatory restriction was removed from 6 April 2024. This is a provider-level decision, not a regulatory requirement.

• From 6 April 2024, subscribing to multiple Cash ISAs in the same tax year is permitted for most adult investors. Before that date, subscribing to two Cash ISAs in the same tax year created a disallowed second subscription.
• The overall annual ISA subscription limit of £20,000 applies across all ISA types combined and has not changed. Exceeding this limit triggers a formal repair process regardless of the April 2024 rule change.
• Lifetime ISAs and Junior ISAs still carry the one-per-type-per-tax-year restriction.
• ISA repairs follow a statutory process. In the current tax year, the ISA manager may void an invalid subscription within 60 days without HMRC involvement. After the tax year ends, HMRC must issue a notice of discovery before the manager can act, and the manager then has 30 days to identify and remove invalid investments.
• Invalid subscriptions lose their tax exemption. For Cash ISAs, interest attributable to invalid subscriptions loses its ISA tax exemption and is treated as taxable savings income, counting towards the investor's Personal Savings Allowance.
• Each ISA manager only monitors subscriptions held with them. The investor is responsible for tracking total subscriptions across all providers.
• Some ISA managers may still limit investors to one Cash ISA per tax year within their own product range, despite the regulatory change.
• Investors aged 16–17 remain subject to transitional restrictions until 5 April 2026.

Related: ISA Allowance: Why It Can't Be Carried Forward | How to Move a LISA Between Providers.