Will you make it by midnight?

The tax year ends at the last stroke of 12 on Wednesday night, and with it goes the chance to buy a 1999/2000 tax-free equity ISA. But beware - some providers will close their doors to applications as early as 9am on the day
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The Independent Online

Last-minute buyers in search of an equity ISA must act by midnight on Wednesday if they are not to lose their 1999/2000 tax-free ISA allowance for ever.

Last-minute buyers in search of an equity ISA must act by midnight on Wednesday if they are not to lose their 1999/2000 tax-free ISA allowance for ever.

The tax year ends at midnight on 5 April, and only correctly completed ISA applications received by the providers' processing centres by that deadline will go through. If the Peps which preceded equity ISAs are anything to go by, the next few days will see a mad rush as ISA investors hasten to buy a 1999/2000 plan while they still can. Some providers are closing their doors to applications as early as 9am on Wednesday. Others will wait until - quite literally - the last minute.

Last year, Jupiter's final successful Pep applicant presented head office staff with her completed form and cheque at three minutes to midnight on 5 April. Sales and marketing director Steve Glynn says: "She was a shift worker. She'd got home that night and turned on the local news, which happened to mention there were just hours to go until the new tax year and the end of Peps. She rang us, said, 'Is it too late?' - and in she popped."

Last-minute ISA sales should be a bit more straightforward, as the new plans, unlike Peps, can be bought over the phone or the Internet. Many of the biggest plan managers are offering ISAs by either or both of these routes, taking the money invested via a debit card such as Switch or Delta.

But debit cards bring problems of their own. Entering the wrong number from the three listed on your card can invalidate your application, as can forgetting to include some of the other data your card carries. Switch Card Services head of marketing Nigel Turner says: "You need to quote the big number across the middle of the card, which is between 16 and 19 digits long.They will also ask for the embossed name on the card, the issue number - where there is one - and the expiry date."

There is no point in using a debit card to pay for your ISA unless the associated account already holds sufficient funds. Using a debit card to buy your ISA also raises a question mark over just what proof of identification might later be demanded from you. Debit card transactions are held to a higher standard under the UK's money laundering rules because, unlike cheques, they do not identify exactly which account the funds are coming from.

Virgin Direct says this means ISA providers using phone or Internet sales should demand as many as four pieces of written identification through the post for each debit card application received. Gordon Maw, the company's marketing manager, claims this is one reason why Virgin is not selling its own ISAs by phone or Internet. Instead, the company relies on providing blank application forms over the Internet and personal delivery points in Birmingham, Manchester and London.

Mr Maw says: " It might sound exciting to say, 'Give us your Switch number and we'll do it all like this'. But the bottom line is, people would have to move money from their building society account, wait for it to clear, send us the application down the wire, then send these four bits of identification to us as well."

Fidelity agrees at least two confirmations of the buyer's identity and address are needed where debit card transactions are concerned. But company spokeswoman Jo Roddan says these checks can be carried out by using sources such as the electoral roll and the telephone book.

Other big providers interpret the money laundering regulations as exempting sums under £10,000. ISAs have an investment ceiling of just £7,000, so Jupiter asks for no additional proof of identity on debit card sales beyond a signature on the normal ISA confirmation form. M&G relies on a similar system.

Mr Glynn says: "The customer can transact over the Internet or over the telephone, and give us the debit card details. We then send confirmation of that transaction through to the customer who, within the ISA regulations, has 30 days to confirm to us that the information there is absolutely correct."

Sue Thornhill, who is the British Bankers Association's money laundering consultant, says all that companies selling equity ISAs via debit card should require is a single verification of the buyer's address. Ms Thornhill says: "It very much depends on the underlying investment. On an equity-only ISA, they follow what they would do if they were selling equities over the phone, and that is address verification. That is the market standard, because an equity ISA is less vulnerable to money-laundering than a cash ISA."

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