Policy paper

Individual Savings Accounts (ISAs) — introduction of a compliance package to improve Individual Savings Account (ISA) compliance and support the digitalisation of ISA reporting

Published 13 July 2026

Who is likely to be affected 

This measure will affect managers of Individual Savings Accounts (ISAs). 

General description of the measure 

This measure enables the introduction of a clearer framework for Individual Savings Account (ISA) providers, helping them deliver timely and accurate digital reporting, whilst maintaining a fair and proportionate approach to compliance. 

Submission of both digital monthly and annual returns by ISA managers will be subject to the points-based penalty regime. HMRC will be able to apply new sanctions in situations where inaccuracies in ISA returns have been identified. 

HMRC will also be able to suspend ISA managers in situations where withdrawal of approval is not appropriate.  

ISA regulations will be amended to allow HMRC to collect an amount representing tax and apply a penalty based on the nature and scope of the ISA compliance failure.  

The ability to suspend the ISA manager will come into force from April 2027 to align with the introduction of the new cash ISA limit. Details of all other changes will be achieved through changes to the ISA regulations. 

Policy objective 

The policy aims to establish a modern, fair and effective ISA compliance framework that supports digital reporting, strengthens oversight of ISA managers, and ensures the ISA system operates as intended, while addressing the findings of the 2020 Gloster Review. 

Background to the measure 

In May 2019, the Financial Conduct Authority launched an independent investigation into the collapse of London Capital & Finance at the request of the Economic Secretary to the Treasury. The resulting Gloster Review (December 2020) highlighted weaknesses in oversight of innovative finance ISAs and prompted a commitment to review the penalties regime. 

A call for evidence was published in November 2021. Subsequent work was initially paused and later superseded by the work on digital ISA reporting, announced at Autumn Statement 2023. Digital ISA reporting introduces new digital reporting requirements, creating the need for updated compliance arrangements, alongside further changes to cash ISAs announced at Budget 2025.  

Detailed proposal 

Operative date 

This measure will take effect from 6 April 2028. The ability to suspend an ISA managers approval will take effect from April 2027. 

Current law  

The account rules for ISAs are set out in the Individual Savings Account Regulations 1998 (SI 1998/1870) (ISA Regulations).   

These Regulations are made under powers contained in Chapter 3 of Part 6 of the Income Tax (Trading and Other Income) Act 2005 and section 151 of the Taxation of Chargeable Gains Act 1992. 

Proposed revisions 

Section 696 of the Income Tax (Trading and Other Income) Act 2005 will be amended to make provision for new penalties to be charged in respect of a failure by a plan manager to comply with any requirement imposed by the regulations and to include provision about appeals in relation to the imposition of the penalty. It will also be amended to provide for an ISA manager to be suspended. 

Schedule 24 to the Finance Act 2021 will be amended to include ‘information about individual investment plans’ and reports/ returns made pertaining to these. 

Summary of impacts 

Exchequer impact (£ million) 

2025 to 2026	2026 to 2027	2027 to 2028	2028 to 2029	2029 to 2030	2030 to 2031
empty	empty	empty	empty	empty	empty

The final costing will be subject to scrutiny by the Office for Budget Responsibility and will be set out at a future fiscal event. 

Macroeconomic impact 

This measure will be formally assessed once costings have been certified by the Office for Budget Responsibility but is not expected to have any significant macroeconomic impacts. 

Impact on individuals, households and families 

This measure introduces a new framework to ensure that ISA managers comply with their obligations under digital ISA reporting requirements. This is expected to have a positive impact on ISA investors by preventing oversubscriptions during the tax year especially when opening multiple ISAs with different ISA managers. This measure is not expected to have an impact on the individual investor’s experience of dealing with HMRC as the changes do not impact on how they interact with HMRC. The measure is not expected to impact on family formation, stability or breakdown. 

Equalities impacts 

This measure may apply to individuals regardless of their protected characteristics. HMRC does not currently hold data on the protected characteristics of individuals impacted by this measure and so cannot assess if there are any disproportionate impacts to protected groups. 

Administrative impact on business including civil society organisations 

This measure introduces a new framework to ensure that ISA managers comply with their obligations under Digitalisation of ISAs (DISA). It will introduce a new penalty regime for ISA managers that fail to comply with their obligations, as well as an appeals mechanism for such penalties, and will allow ISA managers to be suspended. The measure will primarily affect ISA managers that fail to comply with their obligations and is expected to have a negligible administrative impact on compliant ISA managers. One-off costs will include familiarisation with the measure. There are expected to be no ongoing costs. The measure is expected overall to have no impact on compliant businesses’ experience of dealing with HMRC as it doesn’t change any tax administration processes or obligations. This measure is not expected to impact civil society organisations. 

Operational impact (£ million) (HMRC or other) 

HMRC will need to implement changes to its IT systems to support the safe delivery of this measure, with current estimates placing these changes at around £7 million. This investment forms part of the wider Digitalisation of ISAs (DISA) programme and supports the introduction of penalty points for failures to submit monthly reports and annual returns by ISA managers from 6 April 2028, alongside new powers to suspend ISA managers and apply penalties for non-compliance with ISA regulations. Existing ISA manager guidance will also need to be updated to reflect these changes as they come into effect.  

Other impacts 

Other impacts have been considered, and none have been identified. 

Monitoring and evaluation 

This measure will be kept under review through communications with ISA managers. 

Further advice 

If you have any questions about this change, contact the Savings policy team by email: enquiries.savings@hmrc.gov.uk.