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Individual Savings Accounts

Volume 491: debated on Tuesday 21 April 2009

To ask the Chancellor of the Exchequer what revenue has accrued to the Exchequer from the taxation of (a) individual savings accounts and (b) the interest on individual savings accounts since 6 April 2008. (266574)

ISAs are tax-advantaged savings products. No tax is payable on interest or capital gains arising on investments held within ISAs, and therefore no revenue accrues to the Exchequer as a result. In 2007-8 the tax relief provided through ISAs amounted to an estimated £2.4 billion.

A small amount of revenue may accrue to the Exchequer in the case of uninvested cash which is held for a period of time within a stocks and shares ISA, however this is not a result of tax. This is because interest earned on this cash is subject to a flat 20 per cent. charge to prevent abuse of the ISA regime. HMRC does not collect specific data on the income from this charge.