HMRC confirms support for Keydata ISA customers

HM Revenue & Customs (HMRC) is taking steps to ensure that customers who invested in Keydata ISA products will not be out of pocket as a result of the company selling ISAs that are not compliant with the law.

Keydata Investment Services Ltd was placed into administration on 8 June this year. HMRC has since been working closely with the Financial Services Authority (FSA), the Financial Services Compensation Scheme (FSCS) and administrators to reach a solution for investors.

The FSCS has confirmed today that Keydata is in default, and it will invite claims for compensation - this process will ensure the vast majority of investors in ISA products will be fully compensated.

The vast majority of customers will not pay tax on their investments in Keydata ISAs - as HMRC will pursue the company for tax due prior to administration, and FSCS will pay the tax on behalf of investors for the period since the administration.

People will be able to reinvest their money in a new ISA without losing their tax-free allowance, once their investment is redeemed or matures, or they receive compensation.

People who have invested in these ISAs do not need to take any action at this time. FSCS will write to all affected individuals to explain what they need to do next.