---
layout: post
syndicate: true
date: 2026-06-23 18:55
title: HMRC ends the ISA tax free status with 22% tax on cash interest
link: https://www.theguardian.com/money/2026/jun/23/hmrc-announces-22-tax-on-cash-interest-held-in-stocks-and-shares-isas
cited: The Guardian
type: linked
---

The sanctity of the ISA is over as Reeves and HMRC announced a 22% tax on the cash interest earned in the wrapper.

This is stupid. I don't hold cash that would otherwise be invested. Which is the goal Reeves has alluded to before - she wants more investment in UK businesses - I hold cash because it earns interest and I hold enough that the interest pays the fees, thus my investments are not sold to pay the fees, I stay invested longer. All new money goes to investments and the account runs itself at no cost.

Now, I will have to hold more cash, that is not invested in order to offset the interest cost.

> Previously, stocks and shares Isa providers have allowed customers to hold money in cash alongside investments, and interest has been tax free. Under rules announced on Tuesday, all of that interest will be taxed at 22%.
>
> Investors will also be restricted to holding less than 100% of their stocks and shares Isa in money market funds -- these are low-risk investments that offer similar returns to cash.